Amadeus hotels 2020 beyond segmentation web version2

Hotels 2020:
Beyond Segmentation
Strategies for growth in an era of
personalization and global change

Hotels 2020: Beyond Segmentation 3

Contents 1. Foreword
1. Foreword 3 Think like your guest
Unique, connected, informed: these are just three watchwords that will define the
2. Executive summary 4 hotel guest, both today and in the future. Understanding a customer is a strategic
imperative for hotels in today’s world.
3. Drivers of change 6
We are operating in an era of unprecedented change. Brands that don’t recognize
4. Opportunities / implications 29 and respond to this run the risk of falling behind the competition permanently.

5. The emergence of personalized service spectrums 32 Nonetheless, change requires bold decisions. Change requires bold actions. Change
requires hoteliers to think in different ways. It is no good just to think about how
6. Mapping a path to 2020 36 hoteliers deliver services better or how to market more effectively. Hoteliers have
to fundamentally think about the services they offer and how they relate to the
7. Contributors 38 future guest.

8. Technology timeline 39 At Amadeus, we are determined to stay ahead of this change. And we are as
determined to help our customers stay ahead of this change too.
9. About Fast Future Research 46
However, thinking from a business perspective, it will require all of us to think
10. About Amadeus 47 about our businesses, not just as hospitality professionals, but as if we are guests.
This will require us to challenge conventional thinking about how we sell, market
11. References 48 and interact with guests. The winning brands will be those that can best meet the
needs of the guest of the future.
12. Survey Analysis 52
At Amadeus, we are curious about the future. We want to understand and make
sense of the future. We hope that this report provides an opportunity for us all to
think about the future of the hotel guest. A future that won’t be defined by past
behaviors, preferences or habits but a future defined by how guests themselves
will want to shop for, buy and experience travel.

However, the danger in such a fragmented world is to think of customers as
segmented groups as we have in the past. Instead, this report recognizes that
guests no longer fit into the clean segments of yesteryear. Each guest will have
their own preferences, demands and characteristics. The challenge for hotels is
to understand and act upon these. This is why we have called the report Beyond
Segmentation. What we hope to achieve with this paper is to get us all thinking
about how we can meet the needs of future guests. By developing a model of
‘service spectrums’ we are closer to thinking beyond the obvious and no longer
expect to continue as we were.

We hope you enjoy reading this report and we hope you also respond to some of
the insights with your colleagues.

Jérôme Destors
Director, Hotel IT, Amadeus

4 Hotels 2020: Beyond Segmentation Hotels 2020: Beyond Segmentation 5

2. Executive summary
Amadeus has commissioned Fast Future Research to undertake a study on the drivers of change for the globally branded
hotel sector over the next decade and the resulting implications in terms of hotel strategy, brand portfolio, business models,
customer targeting and innovation.

As hoteliers emerge from the recent The study evaluated a number of Hotel 2020 - Key characteristics of 3. Deep understanding of an 6. Open, listening, collaborative and 9. Asset light, insight rich
economic downturn and start drivers and focused in particular on successful players in tomorrow’s world increasingly geographically, financially, experimental approach to innovation With a focus on becoming lean, flexible
developing strategies for the next those shaping the global context Some key insights arise from the generationally and attitudinally diverse Hotels will increasingly adopt best and responsive, hotel groups will
decade, it is critically important to and environment for hotels and their research about the characteristics, and rapidly evolving customer base practices from other parts of the continue to shed their fixed assets and
scan ahead and understand the guests, the needs of tomorrow’s nature and capabilities of the successful There is a clear expectation of a business world and start to integrate develop innovative financing models
key external drivers of change and traveler, business transformation global hotel brand of the future: growth in tourism from the emerging the customer and other business for hotel investors. Analysts will
emerging opportunities that could within the hotel sector and emerging markets although it’s by no means partners into their innovation processes increasingly start to value groups on
be shaping the agenda for the hotel developments in technology and 1. An organization capable of surviving clear how profitable that business will by using techniques such as open the depth and quality of their market
sector. It is clear that the decade ahead connectivity. The assessment of and thriving in turbulence and be. At the same time the fallout from innovation and crowd-sourcing. insight and their understanding of
will be characterized by megatrends opportunities and implications for uncertainty the financial crisis could see an even emerging drivers of change.
that promise economic uncertainty, hotels focused on developing strategy The path of the economy and hotel broader spectrum of customers and 7. Continuous search for ancillary
a potentially massive shift in wealth in an uncertain world, management market over the next ten years is diverse needs from established markets. revenue streams 10. Continuous evolution –
from West to East, transformational of the brand portfolio, evolution of uncertain. We have to prepare for a Traditional segmentation models will A range of approaches will be the hotel as a living laboratory
advances in science and technology and business and revenue models, location range of possible future scenarios. no longer suffice as we try to capture considered to increase revenue Hotel groups will increasingly view
rapidly evolving needs and expectations and categorization in the era of This implies development of leaders, the needs and nature of tomorrow’s generation including discount offers themselves as being in a constant
of the individual consumer. This report personalization. managers and staff who are curious, traveler. to capture a share of pre- and post- state of experimentation – with the
is designed to provide a rapid scan of tolerant of uncertainty, capable of trip travel spend, introduction to the individual properties acting as living
those drivers and offer critical insights The growing focus on personalization scenario thinking and willing to make 4. Delivering a personalized experience hotel’s own branded goods catalogue laboratories for the development and
on the potential implications and of the hotel experience has given decisions with imperfect information. through a wide spectrum of service and extension of the range of business testing of new ideas. Every customer
opportunities for the hotel sector. rise to the concept of moving beyond choice services provided. interaction could be viewed as a
segmentation models towards the 2. A portfolio of strategies for an Customers will increasingly demand potential source of feedback,
The report draws on a combination of introduction of service spectrums in evolving marketplace choice over every aspect of their hotel 8. Connected, adaptive and predictive new ideas and competitor insight.
desk research, expert interviews (see which the guest is given choice over In response to differing rates of growth stay – encompassing check-in and Tomorrow’s hotel will be far more
section 7 for list of interviewees) and almost every aspect of their hotel and development, hotel groups will departure, service levels, the size of embedded in the internet, playing an
a global survey on future strategies experience. The possible components increasingly adopt a portfolio approach the room, decor, the furniture in it, the active role in social media and using
and business models for the sector. of such a spectrum are discussed. to strategy with a range of different audio-visual facilities, amenities and it to highlight the changes on the
The survey received a total of 610 Finally a framework is presented of key goals and approaches being pursued in food and beverage options. horizon. Internally, a greater emphasis
respondents from around the world, challenges for leaders as they map their parallel within different geographies will be placed on flexibility to respond
of whom 42 per cent work in the travel path to Hotel 2020. and market tiers. An increased use of 5. Immersive, tactile and multi- rapidly to a changing environment. New
industry. The survey posed a range of co-branding with well known consumer dimensional technology interfaces advanced analytical techniques and
scenarios relating to hotels in 2020 and businesses is expected, along with the Generation Y and those that follow software tools will be adopted to help
asked respondents to rate whether they emergence of unbranded hotel groups them are coming into the hotel as anticipate future patterns of demand.
strongly disagreed, disagreed, agreed or providing ‘white label’ services to hotel both guests and employees with a very
strongly agreed with the statement. owners. Greater experimentation different relationship to the technology
with business models is expected – they use. For them the boundaries
with a proliferation of auction based between the physical and virtual world
models, low cost airline style pricing have blurred and the range of ways in
and a growth of 24 hour rental models which they’ll interact with their data
replacing the fixed night option. will be far more visible and tactile than
anything we’ve experienced to date.


3. Drivers of change
This section explores critical global drivers that are shaping the operating context for hotels and their customers in the next Figure 1 - Public debt in 2020 (per cent of GDP) (Deutsche Bank Research)5
decade. While there are a wide range of drivers that could clearly have an impact we focused on four key clusters of drivers in
the discussion below: 300 2010
Global context
2020
Key developments shaping the customer’s operating environment and the impact for hotels 250

Tomorrow’s traveler
Persistent, emerging and potential needs and behaviors of tomorrow’s hotel guest 200

Business transformation
150
Trends in innovation, design and strategic thinking within the hotel sector

Technology and connectivity 100
The wired world of guests, bedrooms, staff and management in Hotel 2020

50
3.1 The global context
Starting assumptions Reshaping the economic landscape At the same time, the crisis has helped 0

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In the next decade, the global context Economic power shifts are forcing accelerate an ‘Eastward Shift’ in

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have selected a few we consider of source and potential profitability of evidence. Since 1995 Asia’s real GDP has
prime importance to hoteliers. We have future revenue streams over the next grown at over twice the rate of America
also made some starting assumptions decade. or Western Europe3. In many cases
about other key drivers to help frame The key challenge is learning to prepare the emerging economies have come The Economist Magazine6 estimates that (i) by 2014, on a purchasing power parity A possible double-dip and lack
our analysis: for a range of possible scenarios as through the crisis with more robust (PPP) basis, Asia’s share of the world economy should exceed that of America and of economic confidence will
>> Politics and security – Geopolitical there is clearly still significant risk left in banking systems, a lower exposure to Europe combined; and (ii) by 2020 Asia could deliver 50 per cent of total sales and impact the demand for travel.
tensions, country failures, terrorism the system and the knock-on impact to derivatives and lower levels of debt profits for some Western multinationals, compared to 20-25 per cent in 2010. Ernst A deflationary world economy
and reshaping of geo-institutions other sectors is still occurring – with the (Figure 1). and Young7 forecasts that the BRIC nations will contribute 40 per cent of global would stifle the industry since
public sector one of the last to feel the economic growth in the decade from 2008 to 2018 while others suggest that even we are an experience economy
>> nergy – Rising demand, hesitant
E effects. The full costs and impact of the Among the world’s largest developed with a recovery in the developed world, emerging markets will deliver 70 to 75 per dependent on discretionary
investment and a slow transition to global financial crisis may take longer economies, public debt is forecast to cent of global growth every year for the foreseeable future.8 income.
alternatives - causing price hikes to assess, but the estimate so far is of a be an average of 118 per cent of GDP Ian Yeoman
total of $20 trillion in bailout funding, by 2014 – up from 78 per cent in 20074. While Asian growth offers an important new source of customers, we can’t just Associate Professor of Tourism
>> nfrastructure – An uneven pattern
I stimulus commitments, guarantees and While the scale of sovereign debt is assume they will be willing to pay the same rates as their western counterparts. Management at Victoria
of global investment – exerting increased spending by governments becoming clearer, what is less obvious In our survey, 70 per cent agreed that there will be a rise in Asian middle class University
influence on hotel development plans worldwide1. Perhaps more importantly is how deep the potential government travelers who will be extremely cost conscious and drive down prices.
for the longer term, we have become spending cuts will be across these
>> viation – Further restructuring
A far more aware of the scale of exposure economies and what impact they
and consolidation in the search for and the size of risk resident within the will have on business and consumer Indonesia is a sleeper –
sustainable business models system. The biggest single source of spending. There is rising expectation a continued stable
risk is posed by the scale of derivative that many economies could experience government will catalyze it.
>> pace tourism – Commercial
S contracts in circulation – estimated at further downturns over the next It’s a difficult market as it’s very
spaceflight takes off – but we won’t $700 trillion at face value – roughly 10 decade. The net effect for the hotel heterogeneous, but I think it will
see space hotels by 2020 times the size of the global economy2. sector is that it will be very difficult to surprise many people.
forecast future revenue streams with Peter de Jong
>> uture eco-shocks – We’ll experience
F any accuracy and hoteliers will have Former CEO, PATA
regular natural and climatic disasters to plan for a range of possible future
and health pandemics. economic scenarios rather than a single
stable set of growth assumptions.


Globalization of business Regional economic co-operation Visa regimes Reorientation of global markets
Despite setbacks during the downturn, Intra-regional travel could be an The removal of travel restrictions is What proportion of the new Asian travelers over the next decade can the branded hotel sector attract and at what price?
there are strong drivers that should increasingly important source of new critical to the attraction of guests from IATA reports14 that for 2009, of the 2.2 billion airline passengers worldwide, 647 million originated in Asia, against 638 million
help increase the volume of business business in the next decade. emerging markets in particular. in North America. By 2013, 217 million more are expected to fly within Asia – giving the region roughly a third of the global
travel over the next decade. In the post-crisis era, a growing Hotels may have to play a more active market. In the U.S. there are three aircraft seats per year for each of the 300 million people who live there. China’s has 0.3
The growth of multinationals from emphasis is being placed on increasing role in helping guests secure visas in seats for each of its 1.3 billion people, while India’s has only 0.1 seats per head for its 1.1 billion. Should Asians ever travel at
emerging economies and developed all forms of trade within regional order to remove hurdles to attracting the same rate as U.S citizens, this would triple global passenger numbers15.
economy businesses seeking out trading blocs such as ASEAN, the customers from the emerging markets.
opportunities in developing nations will European Union and the Gulf Co- Almost all countries now require visas In Travel Gold Rush 2020, a report developed by Oxford Economics for Amadeus in September 2010, it suggests that looking
both drive an increase in demand for operation Council (GCC). Promoting from certain non-nationals who wish forward to 2020, Asia will account for one third (32 percent) of global travel spend, up from only 21 percent today, which
hotel rooms. At the same time, the push intra-regional tourism has been to enter their territory12. The 2010 represents a dramatic realignment over the next ten years.
to create new cities across the Middle targeted by ASEAN1 as part of a project Henley Global Visa Restriction Index
East and Asia in particular will lead to to improve the region’s commercial shows UK passport holders can enter As these travelers are likely to have a different wealth profile and spending capacity, competition will emerge to win their
up-front demand for hotels to house competitiveness and create a fully the most countries (166) visa free while business. Even if they do want to stay in globally branded hotel chains, many may not be willing or able to pay the kinds of
the professionals involved in such integrated economic community by Indian and Chinese passport holders rates currently enjoyed by the sector. In the survey, 79 per cent agreed that by 2020 ‘heavy investment in emerging tourism
developments. 201511. Similar initiatives are also can only travel without visas to 50 markets will widen traveler choice, increase competition and potentially drive down prices and profit margins across the
underway in Central America and in and 38 countries respectively. In June spectrum of hotels’.
Talent Europe with the Calypso Social Tourism 2010, Israel recognized the challenge
The ability to attract, motivate, develop program. Hence, competition to attract of attracting key Chinese tourists by
and retain sufficient talent will be a key regional travelers and have them stay easing visa applications for organized
success factor. ‘on continent’ will increase. 82 per cent tour groups from the main Chinese
Despite the downturn, industries across of all survey respondents and 77 per cities13 . In our survey only 56 per cent
the globe are facing the prospect of cent of those in the travel industry of all respondents and 51 per cent from
a growing talent shortage as baby agreed or strongly agreed that ‘city the industry ‘expected a relaxation of
boomers retire and insufficient or country based alliances are likely, visa regimes to attract visitors from
numbers of skilled workers come into resulting in preferential marketing / emerging markets and BRIC economies’
the economy. As of August 2010, the pricing of certain destinations’. by 2020.
World Travel and Tourism Council
(WTTC) estimates that travel and
tourism employs 235 million people Trading blocs such as ASEAN
worldwide and that this will grow to may open the way for freer
303 million by 20209. movement.
John Koldowski
In a Manpower 2010 survey, ‘restaurant Director of Strategic Intelligence,
and hotel staff’ was ranked 6th in terms PATA
of the size of its talent shortage in the
U.S., 7th in China and 9th in the UK10 .

A poor corporate culture
amongst larger firms may drive
talent to more innovative firms
such as Joie de Vivre. Leveraging
best talent will still be critical.
Unless you have people with
foresight and knowledge,
technology will not be a
differentiator.
Susan Black
Founding Partner, Black & Wright


Sustainability Carrying capacity The biggest opportunity and threat is how we manage the carrying
In the face of growing concerns about borrowing consumption from future Hotels have diminished their One of the growing challenges for the capacity of a given destination – not only fragile environments but
generations, the sector is under increasing pressure to prove it is driving down its environmental impact – they sector is what happens when a site also more generally. We are not set up for the avalanche of new
environmental footprint and developing truly sustainable operations. deserve to be complimented or destination reaches its carrying travelers – environmentally or socially. Travel must become more
Tom Rowntree of InterContinental Hotels Group (IHG) says the average European and they are in general great at capacity. expensive but it has now become an inalienable right. There are
hotel produces 3000 tons of carbon dioxide emissions per year while the operations. The World Heritage Committee names apostles for this sort of return to elitism. It will take courage that is
equivalent in Dubai produces 6500 tons16. The capacity to identify and leverage Peter de Jong 34 sites on the list of World Heritage hard to find as it is self-defeating in the short term.
best practices across a global portfolio offers a major opportunity for hotel chains. Former CEO, PATA in danger, including popular tourist Peter de Jong
In the survey, 83 per cent agreed that by 2020 ‘environmental considerations will sites such as the Florida Everglades22. Former CEO, PATA
play an increasing role in the choice of business and leisure hotels’. Despite the Quotas have also been established
concerns, there are clear reasons for optimism as across the industry, significant for key sites such as Machu Picchu in
advances are being made to reduce its ecological footprint, for example: Peru and Kruger National Park in South
Africa. Such quotas may become more
>> Hotel 1000 in Seattle Washington has a Guest Sensor which detects when the common as a mechanism to control
room is empty and adjusts heating and lighting accordingly while alerting service visitor numbers and encourage high
staff to clean the room17. value, low volume tourism.

>> The Crowne Plaza close to the Oresund strait that separates Denmark and
Sweden has an 86-meter (232-feet) concrete and steel tower covered in around Tourism congestion is a big issue
1,500 solar panels, producing 170,000 kilowatt-hours of electricity annually, and has been for the last 10-15
which can power 55 households. In the tower’s basement, a geothermal well years. It rewrites the delivery of
serves the hotel’s heating and air conditioning needs, reducing its energy bill by the experience product…
about 90 percent. The 366 rooms have water-saving taps, low-energy light bulbs and restrictive facilities, in
and biodegradable amenities18. general, will occur.
David Jones
>> Guests using the gym of the Copenhagen Crowne Plaza can earn a meal voucher Former Director Genera, the
worth about $36 by producing at least 10 watt-hours of electricity on an exercise WYSE Travel Confederation
bicycle connected to a generator -- typically equating to around 15 minutes’ of
activity19.

>> otswana won the Tourism for Tomorrow 2010 award for its destination
B Environmental rules will be
stewardship20. The country has a clear ‘low-volume - high-yield’ strategy, with mandatory across the board.
conservative limits on bed and vehicle density. The question is whether other Carbon offsetting will be a huge
destinations will adopt a similar stance and what impact that will have on the part of the ticket. When tele-
business models and strategies for hotel operators in these locations. presence is a viable option then
that will be huge, people will ask
>> Emirates Hotels & Resorts received the Tourism for Tomorrow Conservation - do I really need to travel for this
Award at the 2010 World Travel & Tourism Council’s (WTTC) Global Summit, two hour meeting?
in Beijing. Emirates’ first resort, Al Maha Desert Resort & Spa in Dubai, was Gerd Leonhard,
designed and built on principles of environmentally sustainable development. CEO, The Futures Agency
This know-how has been applied at the new Wolgan Valley Resort & Spa in
Australia - the world’s first hotel certified as carbon neutral by an internationally
accredited organization21.


3.2 Tomorrow’s traveler Newly wealthy and ready to travel
A deep understanding of the new middle classes will be critical to tomorrow’s hotel propositions.
In this section we explore how the nature, needs and expectations of tomorrow’s traveler may evolve. Continued growth of the emerging nations is increasing the proportion of the population that can be considered ‘middle
class’. The World Bank23 estimates that the global middle class will grow from 430 million in 2000 to 1.2 billion in 2030,
defining the middle class as those earning US$10-20 a day (an average income range between Brazil and Italy). The Bank
The evolution of segmentation to understand the buying triggers and Another source of frustration is the predicts China and India will account for two-thirds of the expansion. Homi Kharas of the OECD states that Asia accounts for
What segmentation strategies emotional influences for those who need to provide similar data on a less than one-quarter of today’s middle class, but by 2020 that share could double.
and techniques can be applied in choose one property over another. repeated basis – to travel agents, visa
a decade where individualism and and customs agencies, airlines and He also notes that by 2020 more than half the world’s middle class could be in Asia and Asian consumers could account for
personalization are coming to the fore? One of the benefits of such a focused hotels. A related concern is the apparent over 40 per cent of global middle class consumption24.
Historically, the industry has placed data mining approach is that it will inability of such organizations to share
great importance on segmenting allow far deeper understanding of the customer profiles. Furthermore, the The rate of growth of the middle classes is clear from the Goldman Sachs projections (figure 2) on the share of population
customers with increasing accuracy true revenues by micro-segment and greater the desire to personalize the with incomes between $6,000 and $30,000 in PPP terms for the BRIC and so called ‘Next 11’ emerging economies25. The
to help define appropriately targeted what it really costs to service different customer experience, the more data will highlighting shows that by 2015 the majority of these economies will have 50 per cent or more of their population in this
offers. Throughout this report, the types of clients and those from different be required to do it. If such information income range.
highlighted drivers suggest traditional geographic regions. Indeed, 97 per cent has to be provided repeatedly, this
notions of segmentation have to evolve. of survey respondents believe that by could mitigate against the benefits of 2009(%) 2015(%) 2025(%) 2040(%)
As our identities become more fluid, so 2020 ‘hotels will increasingly consider personalization.
Brazil 46 52 59 57
the ability to define consumers by their factors such as cost of servicing, level
income or buying behavior becomes of spend and average length of stay Social networks may offer one solution. Russia 71 71 56 29
ever harder. How do we segment a when targeting potential customers in There is increased competition to India 6 16 46 89
divorced female executive who buys different geographic markets.’ ‘own the social graph’ and provide a China 37 59 75 53
value meals on weeknights, likes the single profile of the individual which
opera and her local football team, Hear me, study me, know me and is then shared across social networks. Korea 67 46 23 7
prefers beer to wine, recycles but loves remember me Customers may be willing to provide a Bangladesh 0 1 6 38
bottled water and has relatives on One of the big frustrations for travelers deep profile to a secure social network Egypt 39 57 84 82
three continents? A greater emphasis is a concern that their voices aren’t if they knew it would then be used
Indonesia 16 29 57 87
will be placed on offering a consumer really being heard by the industry effectively by all travel providers. More
led spectrum of choices from which and that hotels aren’t paying enough importantly, they need to see that such Iran 70 77 73 41
guests can personalize their hotel stay attention to dialogues on social media. data would really be used to personalize Mexico 61 65 65 49
– encompassing everything from room While some industries have embraced the travel experience and that hotels Nigeria 6 9 18 42
size to linens, media and amenities. concepts such as co-creation with will continue to learn about the guest
customers and open innovation to through each stay. The differentiation Pakistan 9 13 22 49
In the survey, 71 per cent agreed that source ideas from outside, many and advantage for hotels comes from Phillippines 16 23 40 69
by 2020 ’traveler motivations will hotels appear hesitant to adopt such what they do with the data to enhance Turkey 79 81 70 36
become increasingly fragmented and approaches. In the survey, 96 per cent and enrich the guest experience.
Vietnam 7 21 51 84
diverse and harder to segment into agreed that by 2020 ‘hotels will need to
clearly definable customer groupings’. develop strong social media ‘listening
An implication is that the emphasis skills’ to understand how customer
of segmentation might change from needs and perceptions of brands and Figure 2 - Tracking the rise of the middle class across the BRICs and N-1126
seeking new customers to better service quality are truly evolving and to
serving existing ones during their develop service propositions, marketing
stay. ‘Micro-segmentation’ based messages, and pricing solutions that
on more sophisticated data mining reflect the needs of an increasingly
techniques may also help spot and diverse customer base.’
market to those with similar profiles
to recent customers. Advances in
cognitive science and techniques such
as neuro-marketing may make it easier


As individual income and wealth increases, travel becomes a natural aspiration. Chinese travel will be the Too busy to care not necessarily be cut from the budget. Craving simplicity
For many, a branded hotel stay at home or abroad could be a once in a lifetime equivalent of the baby boom - One of the most challenging groups to In the survey 83 per cent felt that by Another dimension of increasingly
or rarely repeated experience. Their expectations will differ from the seasoned it will change the world.’ serve will be those who demand highly 2020 ‘people will view travel as a right complex lives is that some consumers
traveler and will have been framed largely through the media and world of mouth. Joe Brancatelli attentive and personalized service but rather than a luxury and consider it an will crave simplicity when it comes to
While some first time guests may have a strong desire for deep personalization of Former Executive Editor, who consider themselves too busy to increasingly important part of their their holiday choices.
the stay to suit their own preferences, many may simply come wanting to be awed Frequent Flyer Magazine spend any time providing the necessary lives.’ Against this backdrop, the role This may mean de-cluttering the hotel
by every aspect of this new experience. The importance of these new travelers was information on booking or check-in. of the holiday will change in people’s room, simple, natural food choices and
recognized in the survey with 75 per cent agreeing that by 2020 ‘the Asian middle The expectation will be that the hotel lives, providing a crucial outlet to relieve a preference for ethical, authentic and
classes will make up the largest share of international travel.’ Hence the emphasis will use technology to find out about stress and offer a much needed break potentially cheaper options across the
will be on the warmth of the welcome, the friendliness and helpfulness of staff, them – e.g. from the internet and learn from increasingly pressurised routines board. In some respects, catering for the
whether these new guests are put at ease or daunted by the experience and the about their needs and behaviors based of daily life. Holidays for this group guest who wants less may be easier –
ease with which they can use all of the room and hotel facilities. on what they actually do in the hotel. may become shorter and less frequent. particularly in terms of room fit-out.
They may opt for easily accessible local
Despite UNWTO predictions of 130m inbound travelers making China the world’s Complex lives, pressurised finances destinations rather than those which
premier destination by 202027, in the survey 67 per cent did not believe China will How will hotels serve those in the require more complex travel planning
become the world’s number one destination by 2020. Indeed, 79 per cent of those developed world, for whom life could and lengthier journeys. With literally
in the Middle East believe Chinese destination supremacy by 2020 is unlikely and get harder over the next decade? every minute counting on such trips,
whilst those in Asia are most inclined to agree with the proposal, it also had the Cuts in public sector spending, layoffs the expectation of the hotel experience
highest rate of people strongly disagreeing, at 16 per cent. of government workers, a cautious and the pressure to ‘get it right’ will be
private sector and the potential for immense. This group could indeed be
further economic shocks could combine the most resource intensive in terms of
to drive down the real value of incomes their demands for quality service and
and savings. As a result, spending their willingness to complain and seek
patterns could experience some redress.
fundamental long term changes. A
January 2010 PayPal28 study found that Financial drivers may also lead to a
one in six British people said they would change in the consumption habits of
80% now save up for things they want rather such travelers – with greater demand
70% than using a credit card to buy them. for refrigeration and food heating
Shoppers have also become more price facilities as they opt to self-cater. We
60% aware, with nearly six in ten people in could also see a rise in time-share and
50% Strongly Agree the study saying they’re more conscious vacation rental demand. Some may
40% of how much things cost and more than decide not to pay for accommodation
Agree half claiming they’ve started bargain at all and choose instead to go for the
30%
hunting. Such attitudes will inevitably increasingly popular option of house-
20% Disagree carry through to the booking of travel swapping.
10% and hotel stays.
Strongly Disagree
0%
Pressure on personal finances may force
us into increasingly complex lives –
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– from elderly care to cleaning and
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home maintenance. We could also see
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a rise in those taking further education
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alongside their work commitments.
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However, holidays will
China will become the world’s number one destination by 2020. 602 Respondents


Wealthy and hard to please An aging society
Those with wealth will continue to play One of the biggest and most persistent
a role both in terms of their demands trends hotels will need to address is the
of hotels and their influence on the changing age profile of society in both
aspirations of the rest of society. the developed and developing world.
The 14th annual World Wealth Report29 Globally, the UN projects that the
from Capgemini SA and Merrill Lynch population aged over 65 will rise from
highlights that overall global wealth 5 per cent in 1950 and 7 per cent in
of those with liquid assets of high net 2000 to 16 per cent in 2050. Within
worth individuals (HNWIs) – those developed economies the proportion
with at least $1 million - increased over 60 is expected to rise from 22 per
19 percent from 2008 to 2009 to $39 cent to 33 per cent between 2009 and
trillion. North American wealth rose 2050, and in the developing world, it is
18 percent while Europe had positive forecast to grow from 9 to 20 per cent
growth of 14 per cent. The value of over the same period30.
Asia’s HNWIs leapt by 31 percent
from 2008 to a total wealth of $9.7 Allianz (2010) projects that, driven
trillion, exceeding Europe’s $9.5 trillion. by the emerging markets of Asia, the
Nevertheless, Americans still constitute global retirement market could grow to
the wealthiest region with 3.1 million $46 trillion by 2020 from $28 trillion in
HNWIs worth $10.7 trillion in total. 201031. This implies catering for an older
traveler and broader family groupings.
This HNWI segment expects 24/7/365 In the survey 57 per cent said that by
service, experiences constant service 2020 ‘multigenerational holidays will
innovation elsewhere – especially in become increasingly popular’, with
the online environment – and drives Europe – the most advanced continent
a general rise in societal expectations. in aging - having the strongest
Hotels may need to get used to conviction about this. A possible
customers who expect perfection, may counter force could be the growing
never be satisfied and are reluctant to trend towards increasing the retirement
provide feedback. age across many developing economies.
This could lead to the baby boomer
generation delaying major travel plans.

The client is king and will become Hotels haven’t updated their The majority of Chinese Long term, the most important impact comes
more powerful and demand a personas – behavior has travelers as well as European from the aging population and demography.
deepening customization of changed but an update is and Americans will be old Key global outbound markets – such as
travel. Value can be tailored and needed every 2 years. They people. There is a serious Germany and the UK - are aging rapidly and this
will continue to be. may have changed their persona graying of populations. Our will impact the whole industry but especially
Peter de Jong many years ago but need to infrastructure planning, Europe where much travel is intra-regional. The
Former CEO, PATA realize that yesterday’s 50 year environmental planning and end demographic question has big implications for
olds are not the same as today’s products have not come to terms government and the provision of infrastructure.
50 year olds. with this. Ian Yeoman
Susan Black Peter de Jong Associate Professor of Tourism Management,
Founding partner, Black & Wright Former CEO, PATA Victoria University


Rising female spending power Personal genetic profiles Engaging Generation i Corporate spending
The pressure to cater more explicitly to Hotels will soon be facing the challenge The historic assumption that future The sector now has to plan for a range of possible scenarios for the speed, scale
the needs of the female guest will rise of responding to customers’ genetic generations will want to travel more and nature of the recovery of corporate travel spending after the downturn.
as the understanding of their spending profiles. than their parents is being challenged. An August 2010 study by The US National Business Travel Association Foundation,
power and influence increases. The mapping of the Human Genome Lastminute.com’s report on The Future sponsored by Visa, found that worldwide spending on business travel fell 8.8
The World Bank estimates that by has enabled rapid advances in the of Free Time (May 2010)35 argues that: per cent in 2009 – reported as the largest drop the industry has seen since the
2014 the earning capacity of females genetic profiling of the individual. “… a new generation will reject travel recession in 2001 and the events of 9/1136. The study predicts that Asia, Latin
will reach $18 trillion - more than Today, websites such as 23andme. altogether in favor of gaming, social America, and the Middle East will grow faster than North America and Europe. The
the estimated 2014 gross domestic com offer us the ability to perform a networking and ‘always on’ media.” study also found that China, the only nation to grow business travel in 2009 (8.5
product of India and China32. Analysts comprehensive genetic test against The challenge for hotels will be to find per cent), and other Asian markets currently increase business travel spending at
recognize that the balance of power a variety of traits to understand a range of equivalent attractions that about four times the rate of the United States. China is forecast to add nearly $130
is definitely shifting and that women our disease risks, carrier status and entice this group of ‘Go-Nowhere- billion in business travel spending by 2014, potentially surpassing the U.S. market
are now a strong economic force to potential drug responses. Such tests are Gamers’ and captures their interest. by 2015.
be reckoned with. Boston Consulting available today for less than $500. By This may imply providing access to
Group estimates that by 2020 females 2020 such information could be carried the kind of rich immersive technology The issue is whether recession-led changes in travel spending patterns will last or
will control $15 trillion or 70 per cent of on our phones and shared with airlines, environment that individuals couldn’t evolve with the business cycle. Clearly some have turned to alternatives such as
total global consumer spending33. hotels and restaurants to ensure that afford at home and offering the virtual meetings and videoconferencing – with Marriot and Starwood introducing
the food we are offered matches our opportunity to try out new games, videoconferencing facilities to tap into this revenue stream. Others have sought
personal health profile. consoles and devices which individuals to centralize meetings in easily accessible locations, traded down on the class
could then go on to purchase at home. of accommodation and reduced the frequency and duration of trips. However
In Asia, ladies’ only floors the increased focus on developed economy firms seeking out emerging market
are coming in more so than Case Study opportunities to counter domestic economic sluggishness will lead to a rise in
previously, which brings about a The Hilton Arlington Hotel travel to certain markets. For hotels the issue is whether rates are the primary
design issue. In Japan there are mechanism for capturing business from their rivals when overall demand is
female only carriages on trains. The Hilton Arlington Hotel sluggish or there are additional service options, loyalty rewards and support that
In general targeting is becoming introduced 15 new PURE Allergy can be offered to attract clients and maintain pricing levels.
more refined, not just based on Friendly Rooms with the goal
gender but on a whole host of of creating an allergy-friendly
factors. environment and removing up
John Koldowski to 98 per cent of bacteria and
Director of Strategic Intelligence, viruses. The rooms use an air Every recession drives awakenings. This recession is driving away
PATA purification system which is business class to be replaced with premium economy.
designed to provide air quality Joe Brancatelli
averaging four times cleaner Former Executive Editor, Frequent Flyer Magazine
than the threshold necessary for
asthma patients. The system is
classified as a Class II medical
device by the FDA. In addition,
micro-fiber, hypo-allergenic pillow
cases and mattress covers are
used to reduce allergies triggered
by dust mites. Source: Hotel
Interactive34


Always on Immersive technology Beyond the experience economy –
The growth in 24/7 access to the Case Study Generation Y and those that follow The rebirth of personalization Case Study
internet via mobile phones could have Hilton Hotels are growing up immersed in the Personalization is forcing industries into a mindset shift from ‘producer-led InterContinental Hotels Group
significant service implications. digital world. This is shaping their segmentation’ to ‘consumer-driven choice’.
The picture most commonly painted Hilton Hotels in Germany and expectations of hotels as guests, Much has been made recently of the desire for consumers to go beyond the IHG is installing Microsoft’s
of our world in 2020 is one where the the UK have launched mobile employees and business partners. acquisition of material goods and to engage in experiences. The concept is now Surface technology in select
mobile has reached every segment web and iPhone apps that enable By 2020 the range and nature of evolving to take account of the desire for that experience to be personalized and properties to enable guests to find
of society and is the most common full booking capability while technologies we use and interact with for the consumer of that experience to be a key player in its design and delivery. the information they need when
internet access tool and means on the go. The service includes and the number of customer ‘touch While our parents and grandparents grew up with high levels of personalization, they want it. Surface is a ‘multi-
of interaction for the bulk of the the ability to access and change from the 1960s through to the 1990s automation and standardization became touch computer that responds
population. Nokia forecasts that the booking info, preview hotel the order of the day. The internet and mobile phone have given new life to to natural hand gestures and
total number of mobile subscribers will images and is fully integrated into the personalization agenda. The internet is providing the choices, while the real-world objects, helping people
rise from 4 billion in 2009 to 5 billion Hilton’s loyalty program. Hilton Smartphone and tablet PC’s and a range of other devices like the Apple iPad interact with digital content in a
by 2015 and expects extraordinary Mobile uses MTT’s intelligent provide the means of access. simple and intuitive way. With a
growth in mobile data traffic - rising mobile hotel platform, m2bed, large, horizontal user interface

Source: Emotiv
300-fold by 201537. At the same time, to meet Hilton’s requirements, A number of advances are combining to suggest that the decade to 2020 will multiple users can collaboratively
the boundaries between how we automatically directing customers herald massive advances in the field of technology enabled personalization, and simultaneously interact with
use technology at home, at work or to a view of the site optimized promoting individual choice as a right and heralding a shift away from ‘one size data and each other. ‘41 IHG has
while traveling are blurring. A January for their particular device. The Mind Control Headsets fits all’ solutions. The emergence of ‘App culture’ is creating a generation which loaded the system with custom-
2010 survey by Lowcostholidays and site is designed to minimize believes that whatever they want, whenever they want it, there’s an App for it. If tailored information such as Web
Dixons Travel (UK) found that 73 per scrolling, clicking and typing and points’ will expand dramatically. there isn’t an App, the social networks provide a platform to discuss it, and if the site content, video interviews
cent considered a mobile phone as an features a ‘click to call,’ feature The challenge for hoteliers will be demand is there, someone will develop it. and local maps, guests can select
essential gadget to take with them on that offers users an alternative to accommodate, provide when activities, plan and print their
holiday and 87 per cent actually used way of contacting Hilton should required and understand the impact Luis Castillo Vidal, an associate professor at the University of Granada in Spain schedule.42
their mobile while away. A further 59 it be necessary. Source: Hotel of these technologies on the hotel and an expert in artificial intelligence, says ‘The better adapted the product is
per cent said they accessed the internet Marketing39 environment. For example, technologies to a person, the more valuable it will be for this person.’40 He suggests that true
while on holiday38. such as augmented reality and mind personalization becomes possible at the point when our devices are intelligent
control headsets are already with us enough to learn our characteristics and behavior through experience. Ideally, we
Many already baulk at the idea of and developments such as gesture will be able to transfer this information between devices much as we transfer
paying for hotel internet access. By interfaces and 3D mobile phone computer files today.
2020 it seems likely that not only will displays could be common by 2020.
free access be demanded, but the (These emerging technologies are These developments provide a means of fulfilling an increasing culture of
accompanying expectations of the explored in the next section.) The individualism, backed by rising personal wealth in developing economies, and
speed, bandwidth and functionality desire for customers to converse in an already demanding western consumer. In the survey 92 per cent felt that by
provided will have increased their own language will also grow as 2020 ‘hotel guests will expect their stay to be personalized around a set of choices
dramatically. will the expectation that hotels will they make at the time of booking or prior to arrival’. This shift towards intense
accommodate multiple touch points personalization starts to challenge and potentially limit the value of traditional
through all of the current and possible segmentation approaches and places greater emphasis on the concept of a
future customer contact channels. customer focused ‘service spectrum’ – a menu of choices from which guests can
configure and personalize their hotel stay should they wish to do so at or after the
time of booking.


3.3. Business transformation drivers Innovation in hotel design
The aspirations of hotel owners and the imagination of their guests will continue
In this section we explore examples of how hotels are driving innovation and strategic change in the sector. to be inspired by innovation in hotel design.
Two distinct themes appear to be emerging in the designs that are being put Case Study
Open innovation and collaborative design forward for the hotels of the future. The first is radical concepts for the location, Mosaic - Winner of the Hospitality
Tapping the innovative talent and ideas of those outside the organization is now form and feel of hotels – with ideas as diverse as cliff side hotels, air cruisers and Design Radical Innovation Award
a priority. flat pack designs gaining Radical Innovation commendations and awards52. The (2010).
Across the business world, firms have been adopting a variety of techniques Case Study second theme focuses on driving innovation into the visual design and operational
to open up the innovation process. Proctor and Gamble are seen as pioneers of Marriott effectiveness of mainstream hotels. Amongst the designs coming through, key Mosaic is designed to deliver
‘Open Innovation’ – an approach that positively encourages those outside the features include a strong focus on customer centric-design and rethinking the affordable, pop-up hospitality—
organization to share their ideas – sometimes for a share of the reward – but often Courtyard by Marriott won end–to-end experience from arrival to departure. Understanding the pressure of prefabricated and portable to
for free. Apple has built an entire business model on this basis – with over 100,000 Hospitality Technology magazine’s our daily lives, hotel designers are also placing greater emphasis on presenting the virtually anywhere. Destination
developers who’ve developed an estimated 300,000 apps for the iPhone – at no 2010 Hotel Visionary Award hotel of tomorrow as an immersive experience with everything we desire offered designers, WATG conceived
cost to Apple. Within the sector, experiments have taken place. For example Hilton for installation of the 57-inch under one roof. Mosaic to be entirely flexible,
Hotels participated in an open innovation challenge targeted at MBA students interactive LCD touch screen comprised of individually
and addressing the question ‘what kinds of partnerships does the hotel chain GoBoard™ in over 130 hotels in This also leads to the notion of offering a safe and convenient place for guests configured, modular Prisms,
need to cultivate in order to grow the business?’ Hilton said a number of the ideas the U.S. and Canada. Developed to escape and experiment with activities they would normally pursue at home. outfitted as needed as spas,
presented ‘have a significant potential to enhance the way we shape the Hilton specifically for Courtyard by Recognizing a growing reaction against standardization and environmental excess, salons, guestrooms, mini-
guest and Hilton team member experience’43. Marriott by Microsoft and Four many designs are emphasizing localization and authenticity, a low environmental homes (multiple Prisms such
Winds Interactive, GoBoard footprint and even modular construction of properties that can be removed after as kitchenette and bedrooms),
Service innovation provides guests with information the tourist season. or tented villas (an addition to
Incremental and radical innovations are being undertaken to refine the guest on the local area, airport, weather, a luxury resort at peak season).
experience. maps, news, business and sports Looking ahead, what can be delivered and the cost of doing it will be influenced Grouped together, Mosaic Prisms
Innovations have been introduced across the spectrum of hotel activities from headlines. Guests can use the by new materials and techniques. Advances in fields such as nanotechnology and are designed to be attached
check-in to housekeeping. While some are to be expected – such as the provision system to find and print travel biotechnology offer the potential for a whole new generation of construction organically to Mosaic Hubs that
of free Wi-Fi, many have been more unexpected. In an effort to drive efficiency, directions to restaurants and local materials. These materials will have the ability to monitor, adapt, clean and repair contain lobbies, restaurants, bars,
Marriott has co-located a JW Marriott and a Courtyard on the same site at the attractions51. themselves and will offer a significantly lower environmental footprint. lounges, and other amenities.
Hangzhou Towers in China with a single management and common back-end Source: Hospitality Design53local
services to support both hotels44. To enhance the guest experience, Hyatt Andaz attractions51.
offers free mini-bar snacks and bottled water, has replaced check-in desks
with ‘hosts’ equipped with tablet computers and opened up the kitchen in its
Midtown Manhattan property to encourage guests to talk to chefs45. It has also
experimented with the reduction of housekeeping services to assess the impact on Emirates Hotels and Resorts
service and costs. All Hyatt Place hotels have installed food ordering kiosks in the invests in ongoing collaborative
lounge areas so guests can order 24 hours a day46. research in all its destinations
and implements architectural
The sector has been embracing mobile technology and social media. To speed Beyond 15 years, hotel styles designs that not only encompass
up arrivals, the Holiday Inn has introduced a Smartphone based Fast Check-in will begin to change drastically environmentally sensitive
service47. Starwood’s ‘Better When Shared’ campaign48 enables guests to share in terms of design and materials building, but also create an
their experiences on the website. In the case of Joie de Vivre, regular weekly used – that will mark a period of authentic ‘sense of place’.
exclusive special offers are promoted to the Twitter and Facebook communities true differentiation. Anja Eckervogt
with great reported success49. There has been a proliferation of travel related social John Koldowski WTTC
media tools ranging from sites that allow you to rate your trip to those that enable Director of Strategic Intelligence,
groups to form, create shared travel plans and potentially reverse auction them PATA
to providers. One example is Dopplr. Members share personal and business travel
plans privately with their networks, and exchange tips on places to stay, eat and
explore in cities around the world. Dopplr presents this collective intelligence - the
travel patterns, tips and advice of the world’s most frequent travelers - as a Social
Atlas50. In the survey 90 per cent agreed that by 2020 ‘customers will increasingly
use social media and collective intelligence travel services (like Dopplr) to define
the desired ‘product’ for a temporary self-forming group’.


Hotel group strategies and business models 3.4 Technology and connectivity drivers
The economic downturn has encouraged all of the major brands to re-evaluate Offering more for less is the goal Remote check-in kiosks will
their strategies and business models. -only technology can solve this In this section we explore how emerging developments in technology and also be developed for guests to
While there are common themes to the resulting plans, there is also considerable problem. connectivity could influence the way in which our guests will work and play, the be checked into their room by a
diversity in what is considered a winning strategy. For example both Carlson54 Mike Blake design of the guest environment and how hoteliers manage their business. For hotel “experience expert” who
and Hyatt55 have recognized some clients downshifting and are developing CIO, Hyatt the decade ahead, technology will be central to better understanding customers, will be able to give the guest their
propositions to target mid-range customers (e.g. $130 / night) in response. delivering on guest expectations, managing operations and refining sales and key while walking with the guest
marketing approaches. In the survey, 95 per cent agreed that by 2020 ‘hotels will to their room.
Many such as Accor56 and Wyndham57 are continuing their programs of selling increasingly look to new technologies to drastically increase efficiency, reduce Jerad Bachar
off hotel assets, extending their expansion into franchising and Management costs, personalize the customer experience and improve service’. Director, Dubai Convention Bureau
Services Contracts and identifying new models of hotel ownership for both their
own portfolio and for the development of new properties. Hyatt and Wyndham are Technology, media and telecommunications convergence
considering taking new brands into their portfolio while they and Accor are placing The next decade promises massive acceleration in the range of technologies
their main focus on extending the existing portfolio. and communication methods available to hotels and their guests. Key will
be the convergence of information technology, entertainment media and
Expansion in Asia, Latin and Central America, Europe and increasingly Africa is telecommunications functionality. A generation is emerging that doesn’t want
a common feature for many, with India a particular focus for brands such as or need to know the difference between them. The challenge for hotels will be
Carlson, Hyatt and Starwood58. There is also a growing focus on driving operational to stay abreast of developments in these fields, monitor changing customer
efficiency for Accor, Carlson and Marriott59 with particular focus on marketing, expectations, understand the storage, bandwidth and security implications and
sales, distribution and technology. Accor and Carlson have both emphasized the adopt a consistent strategy for managing the introduction and exploitation of new
development of online capabilities coupled with development of their loyalty technologies. The more technologies converge, the greater the likelihood that the
programs as key drivers of customer acquisition and retention. customer will bring with them that which was previously provided by the hotel –
from entertainment through to broadband connectivity.

Listed below are examples of technologies we expect to see in hotels in the next
decade, broken down under six key domains of use although most will have
applications across multiple domains. They are described more fully in appendix 1:

1. Relationship management

2. Personal technology

3. uestroom functionality
G

4. eeting support
M

5. Guest services

6. usiness operations and management
B


Widespread now Widespread by 2015 Widespread by 2020
Relationship Management
1.67 billion web users Dominance of online bookings 5 billion web users
Rise of social meeting Evolution of Customer Relationship Intelligent agents / Software assistant
Travel planning Management (CRM) Semantic web
Tablet computers High bandwidth wireless broadband Intelligent web
Wireless broadband Speech recognition and language Immersive web (Use of web technology to
Virtual travel Translation in daily use deliver sensation, experience and emotion)

Personal Technology
Augmented reality Explosion Of personal display devices 5G phones
Mind control headsets Gesture interfaces (Figure 1.)
4G phones Heads up displays
Intelligent interfaces
Guestroom Functionality
Centralized and personalized control of 3D TV 4D TV
media, lighting and temperature Multimedia beds Sensor-based room management
IP telephony Personal robots
IPTV
Smartphone room access
In room concierge
Meeting Support
Video conferencing / Tele-presence
Virtual meetings and Hybrid events
Guest Services
Self service kiosks Interactive displays Touchable holographs

Source: Frog Design
3D displays Interactive surfaces Haptics technology
Near Field Communication (NFC) (allowing users to physically ‘’feel’ virtual
Quick-Response (QR) codes objects on a computer)
Business Operations And Management
Cloud computing Biometrics (E.G. Voice / Facial recognition) Sensor networks
RFID Swarm intelligence (Analyzing group
behavior)
Remote sensing security
Crowd farming Figure 1. The whole of generation Y is completely tech
Data security Ambient intelligence Gesture Interfaces savvy – the industry needs to keep up but having
Hybrid platforms said that, the concept of providers meeting
Monitoring and surveillance consumer expectations is important. The shift will
Knowledge mining alter the industry’s relationship with traditional
Predictive analytics media and leads the industry down a path of
increased customer awareness.
David Jones
Former Director General,
WYSE Travel Confederation


4. Opportunities and implications
Converging technology will render some devices out of date as more user friendly, In the face of continued economic and market uncertainty, an evolving customer base and rapid technological change, clear
wide ranging devices are created. The iPad for example, with its enhanced Case Study questions arise about what strategies branded hotel groups should adopt for the decade ahead. In this section, we explore
functionality, may replace the laptop. This brings about questions for hotels – do Joie De Vivre five separate dimensions of the issue, which are discussed below:
they encourage BYO technology and provide skilled systems back-up, or attempt to
offer a range of technologies for guests’ use? Ian Yeoman reinforces the view that Joie De Vivre operates 33 luxury
the mobile will gradually replace the PC as an access channel, explaining that ‘…a hotels in California and uses >> Developing strategy in an uncertain world >> ocation
L
fraction of consumer transactions at the moment are via mobile, most are done on multiple social media platforms
the PC. The former can only go up; the latter can only go down. The main barrier to drive sales and marketing – >> anagement of the brand portfolio
M >> ategorization in the era of personalization.
C
is the cost of data and roaming. That’s the flip point. Once it’s reached, mobile with extensive use of deals and
payments will increase.’ coupons. Every Tuesday, Joie De >> volution of business and revenue models
E
Vivre tweets a new deal to its
Technology management challenges nearly 10,000 followers. Followers
The challenge for the sector is not to try to identify every possible technology that have hours to book the heavily
might emerge, but rather to develop an effective scanning mechanism to monitor discounted rate. Similar deals are Developing strategy in an uncertain Management of the brand portfolio Leverage of high street and
and evaluate new developments quickly. Key will be engaging the customer in the offered to its 5,000-plus Facebook world Successful delivery of brand strategy luxury brands
evaluation of all the technologies that could either be brought in by them or which fans on Fridays. Joie De Vivre has Portfolio management approaches to will be dependent on the ability of the There trend towards promoting the
could touch the guest during their stay. Given the range of technologies coming at booked over 1,000 room nights strategy will increasingly replace single organization to translate vision into product brands used within a property
the industry and the pace at which they are arriving, there are naturally concerns through such deals in less than global models. All of the indicators capability, processes and customer or ‘luxury branding’ the property itself is
about the industry’s capacity to absorb, evaluate, implement and actually benefit a year with reportedly increased and drivers of change discussed in experience. Faced with a challenging expected to grow. For example Dubai’s
from these developments. John Stachnik argues that ‘99 per cent make use of it, loyalty and trust as a result of this report point to at least a decade economic outlook, views differ on Burj al Arab Suites highlights its use of a
but then you have to ask how many do it well. Maybe 30 per cent do so. If they using this system. Source: Hotel of widespread uncertainty across the whether hotel groups should seek range of Hermes bathrooms products61.
can’t handle their technology then how can they handle customer service?’ Marketing60 globe as countries recover from the to specialise on key niches or pursue Going a step further to full property
financial crisis, wealth shifts across the a diversified portfolio. In the survey, branding, the first Giorgio Armani hotel
There is general agreement with the view expressed by Tanya Venegas that ‘…the planet, industries reinvent themselves 78 per cent believed that by 2020 opened on April 27th 201062. The hotel
travel industry tends to lag behind other industries when it comes to technology.’ and society comes to terms with the ‘global hotel groups will increasingly offers 160 rooms and suites and eight
John Stachnik suggests this needs to change and that ‘…possessing great impact of these changes on their seek to cover the full spectrum from restaurants spread over 11 floors of the
technology before the event is, and will increasingly become, very important. On personal circumstances. The notion of budget through to luxury and heritage Burj Khalifa in Dubai, the world’s tallest
site (for guests use), it’s a nice addition but with mass penetration of iPods, iPads adopting a single global hotel strategy properties.’ The expert interviews and building. In the survey, 79 per cent
and Smartphone, it’s not essential. Wi-Fi is another matter. User friendliness must or business model could be abandoned survey respondents highlighted that, said that by 2020 they expect ‘a new
underpin all technology offerings,’ completely in the next decade. In its to a large extent, the issue was not the category of co-branded and co-designed
place, the idea of a portfolio approach choice of strategy, but development ‘signature’ properties to emerge within
Joe Brancatelli believes that tech-savvy customers could impact revenues ‘…BYO to strategy has emerged – with of the right management capabilities, hotel chain portfolios, providing
technology really raises an issue – effecting movie rental revenue for example. If different goals and tactics being operating processes and staff differentiation and opening up ancillary
a guest brings everything they need – music, video, computer, that changes the deployed for different geographies and capabilities to deliver on the revenue stream options’. The closer
hotel experience’. Thus hotels ‘…need to stay up to date with product offering and market tiers. preferred option. the tie between the brands involved,
consumer trends and match their expectations,’ suggests Jean Luc Chretien. the greater the potential to theme
In an era where difference, creativity the hotel, individual rooms and every
‘A cloud solution around and adaptability will be valued highly aspect of the hotel experience. This
email, would enhance internal by guests, far greater emphasis will in turn could yield additional revenue
communication, allowing staff need to be placed on developing opportunities long after the stay.
to be more productive and distinctive strategies and customer- The co-branding concept could evolve
engaged at work, indeed centered innovation. In the survey 96 to personality branded properties.
technology can make work more per cent agreed that by 2020, ‘in the We have grown accustomed to film
fulfilling. This equates to a better face of intense global competition, the stars, models and sports personalities
guest experience.’ hotel industry will develop a strong branding food, clothing, cosmetics
Mike Blake focus on strategy and innovation – and even stores – could the concept
CIO, Hyatt adopting approaches such as crowd be extended to hotels? Would there be
sourcing and open innovation to customers for the Jumeirah Beckham
generate new ideas.’ Towers or the Hyatt Madonna?


Unbranded hotel groups Evolution of business and revenue The quest for ancillary revenues In the survey, we tested responses to Location In response to such challenges, Jordan’s
New owners in particular may seek to models The search for ancillary revenue a range of revenue generation ideas. Joe Brancatelli believes that ‘… Ministry of Tourism has introduced a
rent the capabilities but not the brand Pre-emptive business model innovation streams could be a candidate for 91 per cent agreed that ‘in the face independent hotels will become about new hotel classification system based
of experienced hotel groups. may help reduce the impact of future an open-innovation approach. The of intense competition, hotels will location and facilities.’ For the majority on the service provided rather than
In many industry sectors such as downturns. changes discussed elsewhere in this increasingly turn their attention to of hotels, location is fixed, and thus a the hotel’s facilities. Maha Khatib,
financial services, the concept of ‘white The economic downturn forced and report suggest that room rates and generating ancillary revenues through legacy determinant of your potential Minister of Tourism and Antiquities,
labelling’ is commonplace. Typically, encouraged firms across a range of profits may come under pressure while activities such as increasing their share market and the facilities you can offer, Jordan explains ‘The hotel classification
well known brands provide a service sectors to experiment with their income from ancillary activities such as of the spend of each guest staying whilst helping shape the services you is designed from the point of view of
for a third party under the latter’s business models, pricing strategies and telephone service, internet access and at their property’. Three other 2020 provide. Two concepts could challenge the guest. It is not the input in terms
identity. This was seen as a viable product bundling. In contrast, the hotel movie rental could all reduce over time. revenue generation scenarios were this. The first is the concept of modular of investment or effort, but the output
option by 77 per cent who agreed that sector has been accused of failing to The challenge for hotels is to strike a presented for evaluation: pod-style hotels that can be erected in in terms of guest satisfaction that is
by 2020 ‘we could see the emergence innovate on its basic business model. balance between maximizing guest almost any environment with minimal the deciding factor in the choice of
of a new breed of unbranded hotel However, survey respondents have a spending on existing offerings and >> 80 per cent agreed that ‘hotels would ecological footprint. The second concept standards and the relevancy attributed
group, offering ‘white label solutions’- clear expectation of change and 81 per selecting complimentary new revenue use discount offers to capture a share is to co-locate different categories of to them. In this regard, the only physical
including sophisticated marketing, cent agreed that by 2020 ‘hotels will generating options that enhance rather of pre- and post-trip travel spend property on the same site. 66 per cent element determined by the new system
very high standards of service and increasingly experiment with a range than diminish the guest experience. A e.g. purchase of luggage, clothing, agree that by 2020 ‘hotel groups and is the size of the rooms. The previous
advanced technology support while of business models’, with those in the common approach has been to offer transportation, insurance, duty-free owners may increasingly seek to co- system considered many others, such as
allowing owners to develop their own industry (83 per cent) appearing more the opportunity to purchase items etc.’ This recognises the huge portion locate different categories of hotel from the size of hallways, swimming pools,
brands.’ Whilst a white label service optimistic than their guests (79 per the guest has tried in the hotel. For of spending around a trip in which budget to luxury in a common location and the kitchen. The new system, for
could be a viable addition to the cent). In practice, a range of innovations example, at Westin Hotels & Resorts, hotels currently play little or no part with shared catering and leisure example, is not concerned about the
portfolio of existing players, perhaps have been adopted and could provide a since the introduction in 2000 of its facilities for use by all guests’. size of the kitchen, but instead looks at
a more common model would be for more effective model for pre-empting 10-layer Heavenly Beds, more than >> 67 per cent believed ‘hotels will create whether the food service is good and
such unbranded groups to be founded future downturns: 35,000 beds and 100,000 pillows have their own catalogues of branded Categorization in the era of delivered in a timely manner, and the
by managers leaving existing chains, been sold to guests after their stay66. amenities, clothing, furniture and personalization food is of a high quality. The back-end
backed by private investors. >> Raffles Dubai has introduced 24 hour decorations’. Brand strength and Hotel categorization may need to structure of the hotel is not taken into
check-in and check-out for guests. The cachet will be critical to the likely evolve to focus more on service than consideration, as long as the expected
Invitation-only hotels service enables guests staying at any appeal and pricing strategy adopted facilities. standard of service is provided68.’
The quest for differentiation is not of the hotel’s suites to stay a full 24 The drivers identified earlier point
expected to lead to the widespread hours from the time of arrival63. >> 89 per cent agreed that ‘hotels will to the growing emphasis that will Whilst appealing, such a change
creation of invitation-only hotels. increasingly provide additional be placed on the quality of service. would require a fundamental shift in
The super-wealthy have become >> Several hotels, such as The Monarch business services e.g. translation, Traditional hotel star rating systems thinking. The focus in physical design,
accustomed to invitation-only stores, in Dubai, have experimented with a access to legal and accounting which focus on facilities provide little in-house processes and staff training
restaurants and cultural performances. ’name your own price’ style auction to advice, secretarial support, company means for guests to assess factors would all need to be oriented towards
Could the concept be extended to avoid simply cutting prices below cost formation, organization of small such as the quality, ambiance, staff maximizing guest satisfaction to
hotels? Our respondents were not so unnecessarily64. meetings, etc.’ This suggests an attitude and ‘warmth’ of a particular ensure a hotel maintains its rating.
sure, and only 46 per cent expect to important opportunity to experiment hotel. Instead, guests have turned to Culturally, a hotel group may be happy
see ‘the emergence of invitation-only >> The Hoxton hotel in London offers a with providing a portfolio of higher the social media to provide peer-to-peer to have a three of four star rating for
hotels’ by 2020. low cost airline style pricing model, added value business services. ratings and assessments of the hotels different brands in the portfolio based
with the first five of the 205 rooms they will and have visited. on physical facilities. However, where
being sold for £1 a night, and pricing a lower rating implies some failure in
then extends up to £185 as bookings service, this may be much harder to live
increase65. with – although it could also inspire
service improvement.


5. The emergence of
personalized service spectrums
Traditional notions of customer segmentation are being challenged. Personalization, the explosion of choice, 24/7/365 Customer relationship / communications
service and the growth of ‘APP-culture’ are driving the need to re-think product propositions. Customers want an increasing There is potential to personalize every aspect of how a hotel engages with its 95 per cent pick a hotel based
say, if not total control, over what they expect of their hotel and what they are willing to pay for. The business traveler who customers before, during and after their stay. This starts with the preferred on its cleanliness, location, price
literally only sleeps in her room may care little about furniture and facilities but demand a bed that guarantees a relaxing channels of communication (e.g. email, sms, via social media or post). Customers and value. These basic four
night’s sleep. Even within organized tour groups, the needs of individual guests may vary significantly. As people increasingly may also want a say on the frequency and nature of contact - for example do they facets are also in their own way,
take their work with them on holiday, so we will also see a blurring between the needs of business and leisure guests. want to receive special offers, pre-trip notifications, and a pre-visit call from the customizable.
concierge to advice on leisure options or from the business host to arrange any John Stachnik Chairman, United
In the survey, 71 per cent agreed that ‘traveler motivations will become increasingly fragmented and diverse and harder special requirements? The loyalty program is also a prime candidate for tailoring – States Tour Operators Association
to segment into clearly definable customer groupings’. This suggests a shift away from a ‘producer-led’ focus on internal enabling guests to choose how they want to receive their rewards from free room
efficiency towards a ‘customer-led’ focus on choice. This implies a ‘total service model’ in which choices could be offered on nights, through to air mile credits to gifts, discounts and cash back rewards.
almost every aspect of what the guest sees, experiences and uses during their stay. This implies moving from segmentation
models and standard packages to a spectrum of service options from which customers then select their precise requirements. Customer journey – core processes
Of course, some may still prefer the simplicity of standard offerings. Here the key is to identify all of the personalization opportunities that exist within
the customer journey processes’ that take place in a hotel from welcome, check-
From a customer perspective, 92 per cent believe hotel guests will expect their stay to be personalized around a set of choices in and room arrival, through to meeting attendance and ending with check-out
they make at the time of booking or prior to arrival. Whilst some might be skeptical about a hotel’s ability to shift to such an and departure. Even if a customer has gone through an automated check-in
extreme level of individual tailoring, in the survey 86 per cent agreed that by 2020, personalization will have been embraced process, there is still potential to offer choice around how they are welcomed. This
wholeheartedly by the sector and that ‘customers will have the ability to choose the size of room, type of bed, amenities, can range from whether they want assistance with their bags, advice or special
audio-visual facilities, business equipment, etc. on booking and pay accordingly’. For some, the hotel experience may offer the assistance on arrival, provision of fruit or snacks depending – for example -
opportunity to try out bedding, furniture, linens, audio-visual equipment and amenities that are a change from those they on their arrival time and length of flight.
use at home. Others may be looking for their bedroom to mirror their home environment as closely as possible in order to help
them feel at ease as quickly as possible. The spectrum of check-in / check-out options will continue to expand with the
various technology developments described earlier. The range would include
Service spectrums demand learning systems traditional check-in desk, ‘hosts’ equipped with a tablet pc to guide you from
Implicit in this notion of service spectrums and total choice is the idea of intelligent computer systems. Based on the arrival through to your room, self-service kiosks, Smartphone based check-in,
experience elsewhere – particularly with web-based providers, customers will expect high levels of embedded intelligence in use of biometrics and in-flight check-in – coupled with biometric or phone-based
hotel systems. This implies remembering their choices, analyzing the details of what they actually did, used and purchased verification.
during their stay and learning from these to refine or enhance the spectrum of choices offered on the next visit. Internally,
this intelligence can also be used to determine what facilities, services and amenities are most and least popular. Staff and service
The ability to deliver a highly personalized experience will be dependent on the
The spectrum of choice offered covers all of the activities and interactions before, during and after a guests’ stay. The ability of staff to recognise and address the differing needs of each guest and
spectrum should also expand over time with advances in areas as diverse as intelligent furniture, personalized nutrition and respond in a manner that reflects what the customer has selected from the menu
our understanding of human cognitive functions and the drivers of choice. Some guests may want to exercise choice on every of options. Some guests may desire a ‘low-touch’ service experience whilst others
element of the spectrum. Others may have specific factors which they want to specify - e.g. the type of bed and linens used - may prefer to be advised and assisted at every possible opportunity. In the same
but be happy for the hotel to provide its standard offerings on all other options. ways as internet access can be purchased in fixed time blocks, guests may wish to
pay for a certain number of hours of personal service to cover items such as room
The core elements of choice within such a spectrum are likely to include the following – cleaning, valet services and concierge support.
which are discussed in more detail below:
Routine tasks such as room cleaning could be made a matter of choice with options
>> Customer relationship / communications >> Food and beverages ranging from daily, as needed (as suggested by room sensors) or on demand.
Robot service assistants would extend the ability of hotels to offer service level
>> Customer journey – core processes >> Technology, media and telecommunications guarantees any time of day or night. From a training and development perspective,
cultural sensitivity, adaptability, problem solving ability and language skills will
>> Staff and service >> Hotel services and facilities be critical for hotels if they are to deliver on the service spectrum concept. In the
survey 93 per cent agreed that ‘highly trained staff backed up by technology will be
>> The bedroom environment >> Pricing key to delivering personalized service and experiences’.


The bedroom environment Food and beverages Technology, media and Hotel services and facilities Pricing
At the core of any hotel stay, guests Case Study The more information we acquire telecommunications Requirements will vary by guest and Today, when a customer agrees a
may want to exercise most choice Citizen M Hotels about our personal pathology, genetic The rate of advance in technology and purpose of stay. While many elements rate for a room, they pay for all of the
when it comes to the location and make-up and nutritional health, the the likely emergence of high bandwidth of a hotel’s services and facilities may furniture, amenities and facilities in
contents of their room. The range of The Citizen M Hotels in more control we want over the food 4G mobile devices means some guests be open to all, an increasing range of that room – whether or not they are
options would need to include the Amsterdam and Glasgow and beverage options available to us. may want a room with no technology. personalized services could be made used. Increasingly, such an approach
floor, corridor positioning, view, room combine several innovations in For many of the customers attending, Others may simply be looking for a available. These might include personal will be challenged by those who only
dimensions, shape, no. of windows, size room technologies to provide the price could also become a bigger issue. display screen or surface to project a security, customized experiences such want to pay for what they use, and
of bathroom, and the type, amount and guest with a chic, and due to the Hence customers may want the ability larger image from their own device. as a cookery lesson with the chef, an who may be willing to pay more for
layout of furniture. By 2020 modular, small size, affordable experience. to order 24 hours a day, via their TV Those who do want the hotel to supply individual art instructor or ‘out of hours’ additional facilities and service. Indeed,
intelligent furniture with built-in The pod like size requires an screen or mobile device, from all of the technology may wish to specify access to sporting facilities. Rather 92 per cent of survey respondents
memory will remember a guest’s innovative approach to space the restaurants in the hotel and from the channels they would like to view, than a pay-as-you-go option for leisure believe that in a highly automated
preferred settings and adapt to changes management – for example potentially cheaper options in the request a 3D TV or book particular facilities, some may wish to opt for world, there will be a range of
in body posture. Other needs such as there isn’t room to move around local area. music and DVDs. A guarantee of the payment of a flat fee to then be able to customers at every price point who are
female only floors may be paramount. the bed to change the sheets. chance to try out the latest gadgets use all of the leisure and spa facilities willing to pay for personal service. This
At the heart of the room, customers Citizen M has applied to patent Other requirements could include may become a brand differentiator for the duration of their stay. For implies offering customers the choice
may want to choose from a range of a system whereby the whole pre-selecting food choices and and attract a particular type of business support, while many may carry of a standard or ‘fully loaded’ room or
different beds, pillows, linens and mattress can be pulled up to the meal times prior to arrival, locally customer. Some may want to book the a suite of technology tools that render a basic room which can be enhanced
amenities at different quality levels front of the bed vertically. The sourced ingredients, and provision opportunity to test out a new product them self-sufficient, others may be through a menu of free and paid
and price points. Some may require used sheets fall off and the clean of refrigeration and food heating or schedule a session with a technology looking for the equivalent of a replica options. Increasingly, customers will
transparency on the environmental sheets can be hung up on the two capabilities. From a dietary perspective, advisor to help them master what they of their office – including full secretarial ask for flexible room times – enabling
footprint of the supply chain of upper corners. The bathroom is customers may want to provide health already have. support. them to book a room for any unit of
everything that goes into their room. divided into shower and ‘throne’ and genetic information in advance time they desire without having to pay
components, each placed in to ensure that they are only offered an excessive price penalty if they don’t
Guests may want the ability to their own cylindrical etched suitable food and beverage options. Case Study Case Study book for a night.
control environmental factors such as glass ‘rooms’. All other in-room They may also want full provenance The Trump Soho, Manhattan Sofitel Manila Plaza
temperature, lighting and even the technology including the flat information for any food and beverages
color of the walls. Choice could also screen TV, music and personalized served to them during their stay. The The Trump Soho in Manhattan The So Fit gym at the Sofitel
be extended to the type of artwork light colour selection is derived ability to meet the chef and tour the boasts a range of advanced Manila Plaza in the Philippines
displayed on the walls or for the from a single remote control69. kitchens may be additional experiential technological features. Central offers a virtual trainer across the
provision of digital photo frames to elements selected and paid for by to its guestrooms and suites is range of equipment. Accessed
display the guest’s own choices. As some guests. the energy saving Control4 Suite via touch screen technology,
technology advances, and intelligent System which enables guests to the trainer can personalize
wallpapers emerge, so guests may be control ambient temperature, workouts based on the fitness
able to configure the room décor on lighting, curtain drapes and level, performance and goals of
arrival or download their preferred entertainment options with a the user. The machines adjust
design beforehand. remote device. Guests can set to an appropriate heart rate for
their own room preferences each user, enhancing healthy
using the Green feature button. benefits and reducing possible
This offering is augmented by injuries or exercise related illness.
flat screen televisions, a home The exercise machines also have
iPhone/iPod and docking station integrated consoles and monitors,
as well as optional in-room enabling the user to watch their
computers and personalized favorite show or listen to their
stationery. The offering is favorite music whilst working
completed with a Nespresso out. Another feature is that all
coffee maker in each guestroom machines feature USB drivers,
and suite70. enabling guests to save exercise
related data, such as distance
traveled or calories burned, should
they wish to do so71.


6. Mapping a path to 2020
This section presents a framework of critical challenges for leaders to navigate as they develop their strategies for Understanding tomorrow’s traveler Potentially, there could be an with new branding concepts? If ancillary
the next 5-10 years. The growth in the global population increasing technology gap amongst revenues are an increasingly important
coupled with rising wealth in our customers. At one end will be those target for us, how can we engage the
Strategic management imperatives developing economies and massive who are technologically self-reliant customer in helping us identify options
Throughout the report, we have emphasized that we are entering an era of uncertainty and potential turbulence. This uncertainty about the future behavior and simply want a room and power that would be valued by them and
suggests that past approaches to strategy development and implementation may need to be revisited as we switch to of customers from the developed socket to support their needs. At the profitable for us? Finally, should we
planning for a range of possible futures. This in turn requires hoteliers to develop their strategic management capability in economies are forcing a rethink of other will be those who expect the wait for industry or government action
six key areas: customer research and marketing hotel to provide the most up to date on quality certification of properties or
approaches. We need to assess whether entertainment, communications and is there competitive advantage to be
1. Horizon scanning - Providing an early warning system by scanning the two, five and 10 year horizons to identify key trends, these approaches are fit for purpose computing facilities. New technologies gained from pursuing our own quality
forces, developments and ‘weak signals’ of possible shocks and opportunities in terms of targeting and attracting will also throw up new challenges assessment audits?
profitable business, capturing the voice – whether it be for increased data
2. Scenario based planning - Evolving strategy development, planning and budgeting approaches to consider a range of of the customer and understanding security or how to manage the impact Beyond segmentation – the rise of the
feasible economic and market scenarios rather than use a single set of assumptions the needs of segments with rising and potential visual clutter that could service spectrum
importance such as the elderly traveler. arise from next generation devices The personalization agenda is growing
3. Anticipation - Having contingency in place to be enacted when the first signs emerge of possible future shocks similar to the The rise of social media and the with holographic and heads up displays and there is a need to explore the
recent economic crisis growing importance of personalization that are projected in public areas of the concept more deeply. The challenge
both raise the question of how well we hotel. will be to adopt an open approach
4. Open processes - Experimenting with and adopting a portfolio of open-innovation, crowd-sourcing and customer understand the concepts and whether that engages the customer at multiple
engagement tools to provide continuous trend input, ideas and challenges to internal thinking we have the right mechanisms in place points through the conception, design
to respond effectively to criticism and and implementation of a service
5. Rapid implementation – Developing the capacity to move idea to decision to execution quickly – ideas that emerge from social forums. spectrum concept. Internally, tough
with a focus on learning and continuous refinement based on feedback from the operating environment Finally, given the growing importance questions will need to be asked about

Source: Frog Design
of the business events market – the skills and capabilities required
6. Tomorrow’s workforce - Development of leaders, managers and staff who are curious, tolerant of uncertainty, particularly in developing economies – to deliver such a model, the staffing
capable of scenario thinking and willing to make decisions with imperfect information. the question arises as to the quality and cost and how to determine pricing.
distinctiveness of our strategy for such Consideration will also need to be given
Understanding the global context Energy, environment and sustainability Given the sheer volume of activity a highly competitive market. to the impact on asset management,
The key here lies in developing The sustainability agenda is likely to going on in each area, future strategies Heads Up Display maintenance and storage if furniture
real expertise in learning to assess become an increasingly important need to ensure a balance between: Managing technology and connectivity is constantly being moved to and
the strategic impact of a volatile priority for countries around the world While ‘Hotel 2020’ is expected to Delivering strategic innovation from guest rooms. From a brand
environment on the hotel business. and result in further legislation. This >> Encouraging locally-driven initiatives be a technologically sophisticated In the face of intense competition and differentiation point of view, the
While the start point is to ensure a raises the baseline questions of how at the property level environment, the journey there will potential pressures on revenue, the question will be how to introduce
rigorous and continually updated well we know our environmental be fraught with tough and expensive spotlight will increasingly fall on the the concept to the market and what
insight into political, economic and footprint for each property and what >> Sharing best practices across the choices. These decisions will also have need for innovation to close revenue differentiation might be possible as
security risks by country, the issue actions are we taking to reduce it? portfolio to be made against a backdrop of rapid and profitability gaps. This raises the competitors launch similar offerings.
is not simply one of deciding which Given expected shortages and rising technological advances and rising questions of how distinctive is our
environments to play in. We know prices for key inputs such as energy, >> apping into best practices being
T expectations of guests and employees short, medium and long term strategy
that some of the most profitable food and water, an analysis should developed in hotels and other sectors alike. This implies that we need not from other hotel groups and whether
hotels are those operating in conflict be undertaken of the impact of a rise just a strategy for which technologies we have sufficient points of difference
zones. Our analysis should help us of 10-100 per cent of any of these >> xploring innovative new methods –
E we will deploy but also a clear strategy to maintain any price premium we are
understand the likely politico-economic resources. for example the use of vertical farms or guiding framework for how we’ll enjoying today? As we look at our brand
scenarios for key countries, while to supply individual hotels. make those decisions and evaluate the portfolio, how should we respond to
internal data should provide insight on options presented to us. the positive support in the survey for
how profitability compares between co-branding and white label approaches
properties in regions of high and – where in our global footprint are the
low perceived security threats. The best candidates for experimentation
analysis should also seek to assess the
contingencies in place or those required
to address potential wildcard (low
probability, high impact) disruptors in
each market.


7. Contributors 8. Technology timeline
Anja Eckervogt, World Travel and Tourism Council (WTTC) Technology Industry implications
Relationship Management
Dee Ann McKinney, Missouri Division of Tourism
Growth in internet users The internet is set to be the primary channel through which hotels engage with their guests. By
2020, the US National Science Foundation predicts the number of internet users will have risen
David Jones, World Youth Student and Educational (WYSE) Travel Confederation & Travel and Tourism Research Association to around 5 billion from around 1.67 million in 2010 (Internet World Stats)1. The primary means
of access is likely to be a mobile device. In our survey 78 per cent strongly agreed and a further 20
Gerd Leonhard, MediaFuturist.com per cent agreed that ‘with nearly 5 billion users expected to be connected to the internet mainly
by mobile devices by 2020, the travel industry will need to adapt its offerings to serve the mobile
Ian Yeoman, Victoria Management School user’. This connectivity explosion will go beyond individuals to include vast networks of sensors
and embedded devices that could transform both the guest experience and the way hotels are
James Harrison, Pestana run.
Is everyone booking online? The importance of the internet as a tool during travel research, price comparison and booking
Jean Luc Chretien, Accor is now well established. The latest PhoCusWright study into trends in the European consumer
travel marketplace finds that less than 10 per cent of travellers with web access in Europe’s key
Jerad Bachar, Dubai Convention Bureau markets plan and book travel products completely offline. Of these internet-connected travellers,
only 9 per cent in Germany, 6 per cent in France and 5 per cent in the UK conducted travel
Joe Brancatelli, Former Executive Editor, Frequent Flyer Magazine. Portfolio.com bookings offline2.

The rise of online travel booking may not kill off offline travel agents. Jerad Bachar argues ‘…
John Koldowski, Pacific Asia Travel Association (PATA)
the travel agent will still play a role in emerging markets for most travel requirements, but over
time, travel agents will evolve into a predominant packaging agency or group tour operator.’
John Stachnik, United States Tour Operators Association Remuneration model for intermediaries will also change, suggests Jean Luc Chretien. He argues
that the ‘...split between direct and indirect channels will not change but there is a move away
Mike Blake, Hyatt from traditional distribution channels.’ A key impact of the internet is to drive transparency of
pricing. In the survey 86 per cent of respondents felt that ‘widespread availability of information
Peter de Jong, Pacific Asia Travel Association (PATA) and transparent pricing will increase competition and drive down profit margins for most travel
firms’.
Susan Black, Black & Wright The rise of social media With expectations of upwards of a billion social network users by 2012, hotels are being urged
to embrace the networks, understand how they are being used and grow their presence in these
Tanya M. Venegas (on behalf of Frank Wolfe), HFTP Research Institute (Hospitality Financial & Technology Professionals) forums. The potential exists, to enhance the brand, strengthen the customer dialogue, encourage
testimonials, build loyalty and ultimately drive sales. The problem for much of the industry as
John Koldowski points out is that ‘…it is not understood how usage can evolve into a booking
pattern.’ Indeed in many ways the future impact and utility of social networks are constrained by
the ability of data analytics to keep up. DeeAnn McKinney emphasises the need for analytics. ‘We
have to find a way to measure social media feedback ROI. People don’t necessarily go to social
media for travel info – so studies say, but they will start to.’
Travel planning Many social media applications now boast more functionality and information than the hotels
they are focused on. This is both a challenge and an opportunity for hoteliers as they try to
evolve a social media strategy and determine whether they should provide the same information
on their own sites. For example, TripKick tackles provides information such as guest reviews
and photos, which rooms to request, highlighting issues such as the best floors, size, bathroom
quality and quietness3. Bing Travel also provides rate indicators for hotels in 30 US destinations
comparing current prices to what they’ve charged in the past4.
Gerd Leonard explains that ‘…people already use API’s (Application Programming Interface).
These are a huge win for the travel industry as they give a great impression of what people are
thinking – there is already a Starwood twitter map. Such applications are revolutionizing travel
planning, by developing and distributing information and thus empowering the consumer.’
Virtual worlds5 The global virtual conference and trade show market is predicted to reach $18.6 Billion over the
period 2010 – 2015, with a CAGR of 56%. Several destinations are already in Second Life, offering
potential visitors a try before you by style experience.


Technology Industry implications Technology Industry implications
Relationship Management Personal Technology
Evolution of Customer Relationship At present, there is a separation for many hoteliers between their CRM applications, their social Augmented reality By overlaying digital information over real world objects, augmented reality offers the potential
Management (CRM) media activity and the actual data gathered about what a customer does in the hotel. Over to enrich a range of human experiences (figure 5). Conde Nast Traveller magazine has already
the next decade we will see an evolution such that more attention is paid to data mining both created four augmented reality travel apps for the iPhone, offering guides to Paris, Barcelona,
the onsite experience and customers social media profiles in order to integrate them into CRM New York and Rome. Each app promises more than 500 listings for restaurants, bars, hotels and
activity and better target marketing communications, offers and rewards. tourist hotspots, with filters so you can sort them by area, style and
Tablet computers The rapid growth in popularity of devices such as the iPad creates the potential to develop guest cuisine12. In the survey 76 per cent expect that by 2020 ‘augmented reality will be part of
apps specifically for these device formats. They can also be used by hotel and meeting staff to everyday life and in widespread use by the travel and tourism industry’.
provide real time information to customers and event participants. Mind control headsets Offering the ultimate in personalisation, a range of mind control headsets have now come to
Wireless broadband6 Gerd Leonhard suggests Wireless broadband could reach 3-4 out of 5 people on the globe by market from developers such as Emotiv (figure 6). These wireless headsets enable you to control
2015-2018. This has enormous implications for global commerce, communications and mobile computers, video games and even objects such as toasters through the thoughts and facial
advertising. expressions of the wearer.

Virtual travel Guests may increasingly want to experience every aspect of their trip virtually before making
Intelligent interfaces Advances in speech recognition, artificial intelligence (AI), and computer power suggest the old
a booking – from viewing their particular bedroom to trying out the pool. Already video and
computer interface (keyboard, mouse, etc.) may yield to an intelligent interface in which we
environments like Second Life provide much of the desired visual and audio experience. By 2020
simply converse with smart computers.
devices such as data gloves, and mind control headsets could be used to recreate a full sensory
experience.

The potential already exists to combine the live and virtual experience in interesting ways. Gesture interfaces Well before 2020, the traditional computer display screen could be replaced by the kind of display
For example, a Japanese resort in the city of Atami offers young men a tourism destination to made popular in the film Minority Report (Figure 7). The challenge for hotels will be the visual
experience with their virtual girlfriends. The experience is based on “Love Plus,” a game which clutter that might be created in public areas if everyone is using heads up displays and gesture
encourages players to develop long-term relationships with virtual women. The Ohnoya hotel interfaces.
offers traditional rooms which feature two sets of futon beds and a barcode panel that allows
the men to visualize their girlfriends7. Heads up displays A stage on from augmented reality is notion of heads up displays (figure 8). In a hotel setting, a
customer might be enquiring about the price of a room at the check in desk while their heads up
Speech recognition and language Google8 already provides language translation for search and hopes to have basic translation
display is scrolling through users’ reviews of the hotel and comparing prices with other hotels in
translation facilities on its Android mobile phone platform within a couple of years. The increasing capability
the area. The display could be projected on to contact lenses or glasses worn by the individual –
of speech recognition systems and language translation technology offer a range of service
although it could also be projected into a space in front of the individual.
opportunities to hotels. By 2020 customers could be able to control and configure all the
technology in their room using a range of voice commands. Language translation could be used Guestroom Functionality
to assist guests and staff everywhere in the hotel from arrival and check-in through to dining and Guestroom technologies A wide range of technologies could make their way into the guestroom of the future.
other facilities. GUESTROOM 20X13 is a bi-annual event that seeks to profile possible technologies that could
Intelligent agents / Software assistant Advances in Artificial Intelligence are enabling the development of autonomous software agents make it into tomorrow’s hotel room. Examples of applications profiled in the latest event include:
that can work independently on our behalf in the online environment. These agents can perform • Centralised and personalised control of media, lighting and temperature
simple acts such as routine searches or undertake more complex tasks such as spotting patterns • A canopy bed with an all-in-one multi-media experience
and responding to enquiries. • bathroom mirror that broadcasts the day’s weather, news and health data
A
• oor mounted digital cameras to see who’s calling
D
Semantic web9 The Semantic Web is the extension of the World Wide Web that in essence becomes your web
• vibracoustic spabath.
A
butler. By connecting seemingly random bits of information on the internet, in new ways,
it offers a new way of creating and sharing content. The semantic web would enable better 3D / 4D TV A variety of 3D systems have come on the market and hotels are evaluating what their strategy
searching of the web, further closing the shrinking knowledge gap between both previous and should be – ignore, adopt in every room or provide on demand. The next generation of 4D TV’s
future guests, as well as between management and guests (in areas such as pricing for example). will include functionality that stimulates the senses through smell and tactile interfaces.
Intelligent web The Web is evolving into an intelligent system that understands spoken inquiries, gathers
relevant information, and forms meaningful, focused answers. More intelligent search engines
are appearing, and intelligent agents being developed by DARPA and others are able to infer IP telephony IP telephony opens up the potential to offer a wide range of new differentiated services for
context as they link users and information. customers in hotels and resorts and the market is forecast by ABI Research to grow from $869
million in 2008 to over $2 billion by the end of 2014. They also suggest adoption of these
Personal Technology systems will gradually move from high end properties to mid-range hotels. Such applications
Explosion of personal display devices While there is growing consensus that the mobile phone or its successors will be the main would for example enable accurate tourist information to be downloaded about the precise spot
device through which we access the internet, the nature of the display is likely to evolve. Pullout at which a guest is located. An example is the handheld multimedia device available at the Berlin
screens, roll-up screens, projection screens and 3D displays are the most widely expected display Wall that provides image displays, video interviews and relevant information at different points
media. However, there is also the potential for hotels to offer ‘any-surface screens’ where you along the Wall.
connect your mobile and have a larger screen interface. IPTV IPTV’s potential to enhance the guest viewing experience is becoming clearer. A 2010 report
4G / 5G Phones Each new generation of mobile phone technology offers an ever-broadening array of from MRG suggests that over 11 million hotel rooms and 1 million airline seats could be IPTV-
functionality. The 4G phones expected to hit the market in the next 12-36 months promise enabled. They estimate that hotels and airlines alone account for a US$1.9 billion global market
wireless broadband speeds of 50-100Mbps (megabits per second) – compared to the average by 201214. IPTV broadens choice and offers the potential for a range of interactive services such
2Mbps for current devices. This would allow for the download of complete movies in a matter of as the ability to make instant purchases of items appearing in a TV programme - which could
minutes. Claims for 5G suggest in could deliver up to 1 Gbps (Gigabit per second) create additional revenue streams for hoteliers.
Smartphone room access Our personal mobile device will also act as our room key. Guests who select the Holiday Inn’s
“fast check-in’” service download the Open Ways’ app and receive a text to their phone which
contains a unique sound code that’s used to unlock the door. The code resets after each usage15.
Sensor-based room management Sensors could allow for far more efficient management of a property. Hotel 1000 in Seattle,
Washington, has a Guest Sensor, which notes when guests enter or leave a room, and adjusts the
room settings to save energy. It can also inform hotel staff when the room is free for servicing16.


Technology Industry implications Technology Industry implications
Guestroom Functionality Business Operations And Management
In room concierge Over the next decade, a range of devices will be used to provide a personalised concierge Biometrics (E.G. Voice / Facial A range of biometric technologies are now available from fingerprint recognition to iris scanning.
service. These could include On-screen on-demand virtual or real concierges, computer tablets recognition) These all offer the potential to speed up check-in and check-out processes. They can act as
or pads, and ultimately personal robots. The Berkeley Hotel in London and The Plaza in New York ‘personal information passport’ providing access control to bedrooms and hotel facilities and for
City offer iPads in all guest rooms and suites. The Plaza’s virtual concierge application offers a completing transactions in restaurants, shops and leisure facilities. The key questions for hotels
multimedia video welcome and enables guests to read newspapers, browse the web, order room are whether the expense is warranted and will the customer see it as an unwelcomed intrusion
service, book restaurants, communicate with the live concierge, request wake-up calls, check on their privacy?
airline schedules, print boarding passes and explore NYC destination guides17. Cloud computing Cloud computing implies renting data servers and software applications over the internet from
Personal robots18 NextGen Research forecasts worldwide demand for all-purpose service robots will reach $15 vendors on a Software as a Service (SaaS) basis. This offers significant potential for greater
billion by 2015, or roughly 5 million robots per year. (CNET News 5/27/09). Robots could perform flexibility in upgrading and changing applications whilst reducing the costs of the servers on
as in-room butler, and core hotel roles from porter to room cleaning. which both the applications and data reside. Nick Price, the CIO of Mandarin Oriental, says any
Meeting Support vendor wanting to do business with Mandarin must present a cloud computing solution26. He
envisions the hotel industry running a shared data model, with a centralized database holding all
Video conferencing / Telepresence High quality video conferencing has been rebranded as ‘Telepresence’ and is now considered customer travel records across the industry, accessible by hotels and consumers from anywhere.
suitable for a range of business meetings – offering savings in travel time, cost and CO2
emissions. Telepresence Insight reports that “The number of Telepresence rooms installed at RFID27 Radio frequency identification (RFID) is a way of tracking and identification using radio waves.
companies has grown from an estimated 2,000 globally in 2008 to around 3,500 in 2009.” Both RFID market to exceed $8.25 bn in 2014. RFID tags are already being used to track delegate
Marriott and Starwood Hotels are installing Cisco Telepresence technology in some of their behaviour in exhibitions and could be applied to track guest flow through the hotel.
hotels19 in the search for ancillary revenues. Ambient intelligence / Sensor Ambient intelligence describes a world where literally every object has an embedded sensor
Virtual meetings and Hybrid events Hotels may seek to offer the functionality to event owners to deliver virtual events and integrate networks / Swarm intelligence or tag. Hotels will contain a massive interconnected set of sensors and RFID tags that monitor
online participants into live events. Applications include broadcasting of audio-visual content, 2D (Analysing group behavior) everything from movement to energy consumption and literally track every guest movement by
and 3D trade shows and virtual participant interaction. communicating with their room access device or mobile. These sensors will literally be embedded
in every object and provide real time intelligence on where guests are, potential bottlenecks and
Guest Services temperature changes. At a macro level, this would enable ever more appropriate physical design
Self service kiosks Whilst the use of kiosks has proliferated in the hotel environment, the question going forward is and placement of facilities. The CityCenter Hotel Las Vegas’ sensor network recognizes as a guest
whether customers will prefer to perform the same functions via their mobile device – rendering approaches the room and configures the lights, curtains, TV channels, climate control, and music
the kiosk potentially redundant. A July 2010 study by IHL Group estimates at least $740 billion to their preferences.
of transactions at self-service kiosks in 201020. An April 2010 study from Cornell’s Center for Hybrid platforms A number of web-based tools such as Google Wave are emerging to support real-time
Hospitality Research (CHR) found that self-service enhances guest satisfaction and improves communication, document and information sharing and collaboration between people within
hotels’ financial results with a time lag. However, when problems occur with self-service systems, and across organisations.
guests are reluctant to return or pay premium rates21. The opportunity with kiosks is to add
additional functionality and provide personalised offers that could generate additional revenues. Monitoring and surveillance An effective network of sensors also provides for more effective monitoring – and for example
– tracking of your children in a resort. James Harrison of Pestana reports that ‘Eden Resort in the
Interactive displays22 Interactive coffee tables, windows and even walls could all enhance the guest experience. Even Algarve (not a hotel, but a destination for families - which we will see more of) has complete TV
skin has become a display surface, with scientists creating a system that uses hands and arms interaction, from ordering food to tracking children, including alarms. If a child goes too near
as touchscreens by detecting the various ultralow-frequency sounds produced when tapping pool or boundary, the parent is notified. It’s a bit scary big brother stuff but as families travel
different parts of the skin. Skinput uses microchip-sized projectors to allow for interactive further and further abroad this will help maintain ‘comfort’ levels for parents.’
elements rendered on the user’s forearm or hand.
Knowledge mining Increasingly sophisticated analytical algorithms and tools are enabling the mining of data to
Interactive surfaces23 Interactive coffee tables, windows and even walls could all enhance the guest experience. Even extract patterns and inferences that tell us for example more about customer behaviour.
skin has become a display surface, with scientists creating a system that uses hands and arms
as touchscreens by detecting the various ultralow-frequency sounds produced when tapping Predictive analytics Analytic techniques are being developed that enable us to predict future behaviour of
different parts of the skin. Skinput uses microchip-sized projectors to allow for interactive individuals, trends and even disease spread. Google for example is able to spot potential disease
elements rendered on the user’s forearm or hand. outbreaks earlier than the health authorities. Such techniques could be used to predict possible
hotel demand based on the social media discussions that follow travel programs.
3D Displays / Touchable holographs The use of 3D holograms is becoming more common to beam speakers in to events and create
advertising installations. A University of Tokyo has gone a step further to create a ‘touchable Data security As more and more customer data is gathered and stored by hotels in order to deepen
holograph’ display using an ultrasound device to add tactile feedback24. This offers the potential personalisation, so concerns will rise about how securely that information is stored. A 2010 study
to create virtual concierges and experiential installations in public spaces. by SpiderLabs found that 38 percent of the credit card hacking cases in 2009 involved the hotel
industry. The sector was well ahead of the financial services industry (19 per cent), retailing (14.2
Haptics technology Haptic interfaces allow users to feel virtual objects on a computer, giving an illusion of touching per cent), and restaurants and bars (13 per cent)28. The report notes that “organizations large and
surfaces and moving objects around. The benefits may be similar to those afforded by touchable small were found to be moving forward with plans to implement new technology, while leaving
holographs. basic security threats overlooked.”
Near Field Communication (NFC) NFC is a mechanism that can be used to exchange information simply by waving a phone over Remote sensing security29 Security could become a key differentiator for hotels. Terahertz, CCTV and other remote sensing
a contact point or another phone. Applications could include guest identification, payment, technologies offer the potential for unobtrusive detection of explosives, weapons and drugs.
verification and downloading travel applications from foyer kiosks.
Crowd farming30 Gettys’ concept of ‘crowd farming’ involves floors that are designed to harness the energy
Quick-Response (QR) codes25 These 2D bar codes are designed to be displayed and read by current mobile phones. QR codes of compression as guests walk over the floor surfaces in the higher circulation spaces. New
are approved by the TSA for electronic boarding passes. QR codes can be used for check in, innovative options of energy generation and storage are likely to feature in many hotels.
security, marketing and offers.


Technology time line references: 17
Hospitality Technology Magazine, 25th June 2010 www.htmagazine.com/ME2/dirmod.asp?sid=8D86DF469BD74C098382
D9532C904D8E&nm=&type=MultiPublishing&mod=PublishingTitles&mid=3E19674330734FF1BBDA3D67B50C82F1&tier
=4&id=C37C0C837F344ACAB42C11E32C710AF1
1
‘Pew: Most will access internet via mobile by 2020,’ by Mark Walsh, December 15th 2008
www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=96642 18
William Halal and Ann Wang www.techcast.org/BreakthroughAnalysis.aspx?ID=38

19
Corbin Ball Associates ‘Ten Meetings Technology Trends to Watch for 2010’
2
Tnooz ‘Few European travellers now planning and booking completely offline’ July 15th 2010, citing PhoCusWright www.corbinball.com/articles_technology/index.cfm?fuseaction=cor_av&artID=7321
www.tnooz.com/2010/07/15/news/study-few-european-travellers-now-planning-and-booking-completely-offline/
20
Hospitality Technology Magazine, 16th June 2010 ‘More Than $740 Billion to be Transacted in Self-Service Kiosks for 2010’
www.htmagazine.com/ME2/dirmod.asp?sid=&nm=&type=MultiPublishing&mod=PublishingTitles&mid=3E1967433073
3
Trendwatching, September 2009 http://trendwatching.com/trends/pdf/trendwatching per cent202009-09 per 4FF1BBDA3D67B50C82F1&tier=4&id=B131AD59482F4775A635529C9A34607B
cent20TransparencyTriumph.pdf
21
Cornell University, The Center for Hospitality Research, ‘Cornell Study Urges Hoteliers to Be Realistic Regarding Guest Self
4
www.bing.com/travel/ Service Kiosks,’ April 8th 2010 www.hotelschool.cornell.edu/research/chr/news/press/prdetails.html?id=663

5
www.virtualedge.org/articles/index/view?id=1651552:Article:8043 22
www.corbinball.com/articles_technology/index.cfm?fuseaction=cor_av&artID=7321

6
www.mediafuturist.com/2009/04/8-key-innovations-we-will-see-during-the-next-5-years.html 23
http://blogs.zdnet.com/emergingtech/?p=2146

7
http://news.discovery.com/tech/love-plus-dating-game.html 24
http://blogs.zdnet.com/emergingtech/

8
http://hothardware.com/News/Google-Working-On-RealTime-Language-Translation-Phone/ 25
www.corbinball.com/articles_technology/index.cfm?fuseaction=cor_av&artID=7321

9
www.biac.org/members/iccp/mtg/2008-06-seoul-min/Final_View_from_2018_ICCP_Chair_Paper.pdf Lodging Hospitality Online ‘Has Hotel Technology Come of Age?’ by Ed Watkins,
26

June 29th 2010 reporting on HITEC 2010 Convention
10
www.beatenetworks.com/blog/index.php?/categories/12-Technology-Immersive-Web / http://nwn.blogs.com/ http://lhonline.com/conferences/technology_HITEC_inroom_software_cloudcomputing_iPad_0629/
nwn/2009/10/new-world-newsfeed-.html
27
www.telecompaper.com/news/SendArticle.aspx?u=False
11
www.globalfuturist.com/global-futurist-blog/81-global-futureist-blog/164--top-ten-extreme-technology-trends-
for-2008.html 28
Trustwave, ‘Trustwave Releases 2010 Global Security Report,’ February 2010
www.trustwave.com/pressReleases.php?n=020210
12
Recombu ‘Conde Nast launches augmented reality travel apps,’ July 2010
http://recombu.com/apps/conde-nast-launches-augmented-reality-travel-apps_M12007.html 29
Horizon Scanning Centre www.foresight.gov.uk/Horizon%20Scanning%20Centre/S_T_clusters__securitydoc.pdf

13
Hospitality Financial Technology Professionals ‘Guestroom 20x’ June 2010 30
http://hot.gettys.com/hotconcepts.php
www.hftp.org/Content/Forms/GR20X/G2X10Guidew.pdf

14
MRG, press release, February 15th 2010 www.prnewswire.com/news-releases/global-hospitality-iptv-forecast-from-mrg-
reports-airline-and-hotel-video-market-over-us19-billion-in-2012-84373967.html

15
ZDNet ‘Holiday Inn to start testing smartphone hotel room key program’ May 2010
www.zdnet.com/blog/gadgetreviews/holiday-inn-to-start-testing-smartphone-hotel-room-key-program/15088

16
WorldMate Travelog ‘Top 10 Tech Hotel Gadgets,’ By R.L. Belloff on 7/2/2010
www.worldmate.com/travelog/2010/07/02/top-10-tech-hotel-gadgets/


9. About Fast Future Research 10. About Amadeus
Fast Future Research is a UK based futures research and consulting firm helping clients around the globe to spot, Amadeus is the chosen technology partner and transaction processor for the global travel and tourism industry. The company
analyze and respond to the trends, forces and developments that could shape the next 5 – 20 years. Fast Future provides distribution and technology solutions to help its customers adapt, grow and succeed in the fast changing travel industry.
specializes in studying the hospitality, travel and business events sectors and is currently running the multi-client Customer groups include travel providers (airlines, hotels, car rental companies, railway companies, ferry lines, cruise lines,
sponsored Convention 2020 study and the Future Convention Cities Initiative. Fast Future’s book – Designing your insurance companies and tour operators), travel sellers (travel agencies) and travel buyers (corporations and travelers).
Future was published in 2008.

Fast Future has undertaken assignments for clients in the public and private sector in over 40 countries on six continents. Amadeus operates under a transaction-based business model that offers IT solutions to virtually all players in the travel
Clients include 3M, ABN Amro, Amadeus, The BBC, BT, British Aerospace, Bayer, Citibank, DeutscheBank, Diamond Trading industry. The Amadeus system processed more than 670 million billable travel transactions in 2009.
Corporation (De Beers), DHL, EADS, Electrolux, Ernst & Young, Fujitsu, GE, HBOS, IBM, ING, Intel, Intercontinental Hotels,
KPMG, Marks and Spencer, Morgan Stanley, Nakheel, Nokia, Nomura, Novartis, Ocean Spray, Orange, Panasonic, Pepsi, Pfizer, Its solutions and services are used by its customer groups in different ways. Over 90,000 travel agency points of sale and more
Playtex, PwC, Qatar Airways, Royal Bank of Scotland, Samsung, Saudi Supreme Commission for Tourism, Shell, Siemens, than 55,000 airline sales offices use the Amadeus System to run their business. Many of the industry’s other leading travel
Thames Water, and Yellow Pages, a number of travel and meetings industry associations and governments in the US, UK, service providers use Amadeus’ modular technology to optimize their distribution and internal operational requirements.
Finland, Dubai, Nigeria, Saudi Arabia and Singapore.
Amadeus is traded on the Spanish Stock Exchanges as of 29 April 2010 [AMS].
Fast Future’s team and extended network comprises a mix of internationally recognized professional futurists, experienced
futures, strategy and innovation consultants, respected futures researchers and highly capable graduate research assistants.
The team brings experience from across the strategic management, futures research and innovation spectrum encompassing:

>> Research and consultancy using a full range of strategy, futures and innovation methods and tools

>> Development of methods and approaches acknowledged as best in class by their peers

>> lient training on scanning, futures, strategy and innovation
C


11. References
1.
www.atimes.com/atimes/Global_Economy/LD13Dj05.html 18
Independent ‘Guests pedal to a cheaper stay at Copenhagen eco-hotel,’ July 2010
www.independent.co.uk/travel/news-and-advice/guests-pedal--to-a-cheaper-stay-at-copenhagen-ecohotel-
2.
www.newsmax.com/deBorchgrave/BankforInternationalSettlements-BIS-derivatives- 2029228.html
MerrillLynch/2010/05/11/id/358672
19
Motley Fool ‘Weird Financial News,’ by Selena Maranjian , June 30th 2010
3.
Economist, ‘East or famine?’ February 25th 2010, www.fool.com/investing/general/2010/06/30/weird-financial-news.aspx
www.economist.com/business-finance/displaystory.cfm?story_id=15579727
20
Tourism for Tomorrow , Winners 2010 – Botswana Tourism Board
4.
Deutsche Bank Research ‘Public debt in 2020’ March 2010 www.tourismfortomorrow.com/Winners/2010_Winners_and_Finalists/botswana-tourism-board
www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000255134.pdf
21
www.emirates.com/english/about/news/news_detail.aspx?article=572461&offset=0
5.
Deutsche Bank Research ‘Public debt in 2020’ March 2010
www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000255134.pdf 22
whc.unesco.org/en/danger

6
Economist, ‘East or famine?’ February 25th 2010, 23
Euromonitor, March 2010, citing World Bank data
www.economist.com/business-finance/displaystory.cfm?story_id=15579727 http://blog.euromonitor.com/2010/03/emerging-focus-rising-middle-class-in-emerging-markets.html

7
Ernst&Young with India Equity Brand Foundation, ‘E&Y report states BRIC nations to account for 40 per cent of world 24
Brookings Institute www.brookings.edu/papers/2010/01_global_consumers_khraras.aspx
growth by 2020,’, 24th December 2008 www.ibef.org/artdisplay.aspx?tdy=1&cat_id=60&art_id=21193
25
Goldman Sachs, August 2009 www2.goldmansachs.com/ideas/demographic-change/power-of-purse-doc.pdf
8
Pambazuka-Pan African Voices for Freedom and Justice,
‘Emerging Markets: The new drivers of growth,’ by Janice Mace, February 4th 2010. 26
Goldman Sachs, August 2009 www2.goldmansachs.com/ideas/demographic-change/power-of-purse-doc.pdf
www.pambazuka.org/en/category/africa_china/61983
27
www.asianews.it/news-en/Mainland-soon-to-be-world’s-top-tourist-destination-8566.html
9
www.wttc.org/eng/Tourism_News/Press_Releases/
28
www.paypal-press.co.uk/Latest-News/THE-RECESSION-IS-OVER-BUT-SHOPPERS-ARE-STILL-CAUTIOUS-c8.aspx
10
files.shareholder.com/downloads/MAN/1009989646x0x375392/7a757c36-85af-4cc4-b819-50be86798382/
2010_global_shortage_survey_results_A4_lo.pdf 29
Capgemini & Merrill Lynch, ‘The 14th Annual World Wealth Report 2010.’
www.us.capgemini.com/worldwealthreport2010/
11
eTurbo News Global Travel Industry News ‘Congress may challenge USAID project,’ March 18th 2010
www.eturbonews.com/14986/congress-may-challenge-usaid-project 30
United Nations Report Warns of Dire Effects of Under population, Fertility Decline,’ by Susan Yoshihara,
PhD, March 5th 2010, Life News www.lifenews.com/int1479.html
12
www.henleyglobal.com/citizenship/visa-restrictions/
31
www.financial-planning.com/news/allianz-retirement-pensions-growth-2668604-1.html
13
People’s Daily Online, ‘Israel to attract Chinese tourists through easing of visa requirement,’ June 8th 2010 ‘
http://english.people.com.cn/90001/90776/90883/7016391.html 32
Gulf News, July 2010 http://gulfnews.com/business/your-money/spending-power-swings-women-s-way-1.649270

14
www.iata.org/pressroom/speeches/Pages/2010-02-01-01.aspx 33
Boston Consulting Group, August 2009 http://www.bcg.com/media/pressreleasedetails.aspx?id=tcm:12-24864

15
IATA, February 2010 www.iata.org/pressroom/speeches/Pages/2010-02-01-01.aspx ,additional reporting by Bay Area 34
Hotel Interactive, July 2010 www.hotelinteractive.com/article.aspx?articleid=17562
Travel Writers ‘Travel Trends: Asia Eclipses America in Aviation Markets — by Lakshman Ratnapala,’ March 2010
www.batw.org/news/industry-news/travel-trends_mar-2010/ 35
www.psfk.com/2010/05/do-the-young-prefer-virtual-sightseeing-to-physical-travel.html

16
www.eturbonews.com/10882/dubai-hotels-concerned-about-their-environmental-impact 36
www.hospitalitynet.org/news/4047876.search?query=corporate+travel+2009+down+ per cent25

17
Source: WorldMate Travelog ‘Top 10 Tech Hotel Gadgets,’ By R.L. Belloff on 7/2/2010 37
U.N report, cited by metamanda www.metamanda.com/blog/archives/2009/03/cell-phone-use-at-60-worldwide.html
www.worldmate.com/travelog/2010/07/02/top-10-tech-hotel-gadgets/
38
LowcostHolidays Blog June 2010 http://blog.lowcostholidays.com/2010/06/17/turning-to-technology-on-your-holiday/


39
Source: Hotel Marketing, June 2009 55
Hyatt data, compiled by USA Today, July 2010
www.hotelmarketing.com/index.php/content/article/hilton_launches_innovative_mobile_booking_solution/ www.usatoday.com/money/industries/travel/2010-07-27-hyatt27_CV_N.htm

40
The Future of Tourism ‘Are we there yet?’ by Mark Eveleigh, 2008 www.futureoftourism.com/tourism-technology.htm 56
Accor, ‘Accor’s strategic vision.’
www.accor.com/en/group/accor-strategic-vision.html
41
www.microsoft.com/surface/en/us/Pages/Product/WhatIs.aspx
57
Wyndham Hotel Group To Acquire Tryp Hotel Brand From Sol Meliá.’ June 2010
42
Uncommon Common Spaces www.htmagazine.com/ME2/dirmod www.wyndhamworldwide.com/media_center/pr/show_release.cfm?id=743

43
Partnership Development for Hilton Hotels 58
Starwood, ‘Starwood Hotels on Track to Grow Portfolio in India 60 per cent by 2013,’ April 2010
www.ideaconnection.com/open-innovation-success/Partnership-Development-for-Hilton-Hotels-00140.html http://development.starwoodhotels.com/news/1/78-starwood_hotels_on_track_to_grow_portfolio
_in_india_60_by_2013

44
Business Traveller, ‘Marriott International to run a JW Marriott and Courtyard side by side’ June 2010 59
Business Traveller, ‘Marriott International to run a JW Marriott and Courtyard side by side’ June 2010
http://asia.businesstraveller.com/asia-pacific/news/marriott-international-to-run-a-JW-Marriott-and-Courtyard http://asia.businesstraveller.com/asia-pacific/news/marriott-international-to-run-a-JW-Marriott-and-Courtyard

45
Hyatt data, compiled by USA Today, July 2010 60
Hotel Marketing ‘How Joie De Vivre Hotels drive new business with social media,’ July 2010
www.usatoday.com/money/industries/travel/2010-07-27-hyatt27_CV_N.htm www.hotelmarketing.com/index.php/article/how_joie_de_vivre_drives_new_business_with_social_media/
Highlighted by Gerd Leonhard in Fast Future interview.
46
Uncommon Common Spaces www.htmagazine.com/ME2/dirmod.asp?sid=&nm=&type=MultiPublishing&mod=Publis
hingTitles&mid=3E19674330734FF1BBDA3D67B50C82F1&tier=4&id=F77685FC047D404CA5C10C9840C463EDasp?sid=& 61
Jumeirah, retrieved August 2010 www.jumeirah.com/en/hotels-and-resorts/destinations/dubai/Burj-Al-Arab/Suites/
nm=&type=MultiPublishing&mod=PublishingTitles&mid=3E19674330734FF1BBDA3D67B50C82F1&tier=4&id=F77685FC
047D404CA5C10C9840C463ED 62
Economist, April 2010 www.economist.com/blogs/gulliver/2010/04/dubais_hotels

47
ZDNet ‘Holiday Inn to start testing smartphone hotel room key program’ May 2010 63
AME Info, ‘Raffles Dubai announces 24 hour check in,’ June 24th 2010 www.ameinfo.com/236215.html
www.zdnet.com/blog/gadgetreviews/holiday-inn-to-start-testing-smartphone-hotel-room-key-program/15088
64
Source: The National, June 2009 www.thenational.ae/apps/pbcs.dll/article?AID=/20090627/BUSINESS/706279930
48
www.sheratonbetterwhenshared.com/
65
Source: Times Online, February 2009
Hotel Marketing ‘How Joie De Vivre Hotels drive new business with social media,’ July 2010
49
http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article5785860.ece
www.hotelmarketing.com/index.php/article/how_joie_de_vivre_drives_new_business_with_social_media/
Highlighted by Gerd Leonhard in Fast Future interview. 66
Marketwatch, press release, July 2010 www.marketwatch.com/story/westin-hotels-puts-heaven-on-sale-25-off-entire-
retail-line-including-iconic-heavenly-bedr-2010-07-15?reflink=MW_news_stmp
50
Dopplr.com, retrieved July 6th 2010 www.dopplr.com/
67
Independent, ‘Jordan hopes its new hotel rating system will be a star,’ February 2010
51
Marriott News, April 2010 http://news.marriott.com/2010/04/courtyard-by-marriott-receives-hotel-visionary-award-at- www.independent.co.uk/travel/news-and-advice/jordan-hopes-its-new-hotel-rating-system-will-be-a-star-1894928.html
the-hotel-technology-forum-for-its-interacti.html
68
Hotelier Middle East ‘Jordan Minister of Tourism on hotel classification,’ March 2010
52
Source: Hospitality Design ‘Radical Innovation Winner Selected,’ May 25, 2010 www.hoteliermiddleeast.com/7721-jordan-minister-of-tourism-on-hotel-classification/
www.hospitalitydesign.com/hospitalitydesign/about-us/Radical-Innovation-W-1718.shtml
69
Source: Trendhunter.com, retrieved August 2010
Source: Hospitality Design ‘Radical Innovation Winner Selected,’ May 25, 2010
53
www.trendhunter.com/trends/pod-hotel-review-citizen-m-amsterdam-airport-schiphol-open
www.hospitalitydesign.com/hospitalitydesign/about-us/Radical-Innovation-W-1718.shtml
70
Sources: JLR Condo Hotel Blog, January 2010
54
Carlson, ‘Carlson Hotels Unveils Ambition 2015 Strategy,’ March 2010 http://jlrcondohotelblog.blogspot.com/2010/01/trump-soho-new-york-joins-jet-luxury.html
www.carlsonhotelsmedia.com/article_display.cfm?article_id=597 and Trump Soho Hotel, retrieved August 2010
www.trumpsohohotel.com/Guest-Rooms-And-Suites/Guest-Rooms-And-Suites.asp

71
Source: Inquirer, April 2009
http://showbizandstyle.inquirer.net/lifestyle/lifestyle/view/20090413-199102/New-hotel-gym-doesnt-disappoint


12. Survey Analysis
What is your primary job function? Region
The survey was conducted in August 2010 and promoted to Fast Future’s global network and via a number of hotel industry The largest group of respondents came from Europe (50%), followed by North America (18%) and Asia (13%).
discussion forums on the social networks.
A total of 610 responses were received.
A total of 610 responses were received

60%
Customer service, Support 50%
Advertising 50%
Operations
Information systems , IT 40%
Human Resources
Finance
30%
Creative, Deisgn
Merchandising, Sales 18%
R&D, Research 20%
13%
Education
Administrative work 10% 8%
5%
Business development 3% 3%
Other 0%
Consultancy
Africa Asia Australasia Central and Europe MIddle East North
Executive Management
Latin America
America
0.00% 5.00% 10.00% 15.00% 20.00% 25.00%

Age Cohort Industry Split
Most age cohorts were well represented in the survey. Of those that answered, 42% work in the travel industry and 58% work in other sectors.
74% fall within the 36 to 55 range, whilst the 46-55 range is the largest group with 30% of the total.

4.75%
0.33% 1.80%
3.28% Under 18 46 - 55 Yes
42%
18 - 25 56 - 65 No
58%
15.90%
26 -35 66 - 75
18.69%
25.41% 36 - 45 76+
29.84%


Travel Industry Sector Hotel Usage – Leisure
Within the travel sector, those involved in the accommodation sector, consultants and visitor and 74% of respondents spend between 1 and 20 nights in hotels per year for leisure purposes.
convention /tourism promotion bureaus were the three largest groups of respondents. The largest group of respondents (40%) spends 11-20 nights in a hotel.

A total of 299 responses were received. A total of 610 responses were received.

Leisure atrraction
Restaurant bar, café 45%
Travel agent
Speaker/Trainer 40%
Tech supplier
Online Travel Solutions 35%
Supplier to meeting industry
Association 25%
Transport
Conference Venue/Convention Centre/Exhibtion 20%
Marketing/PR/Advertising
Dsetination Management Company 15%
Meeting Planner
Visitor and Convention/Tourism Promotion Bureau 10%
Consultant
Hotel/Hostel Accommodation Sector 5%
Other
0%
0 5 10 15 20 25
0 1-10 11-20 21-30 31-40 41-50 51-60 61+

Hotel Usage – Business
49% of respondents spend between 11 and 40 nights in a hotel on business per year.27% spend more than 40 nights a year in
a hotel on business. The largest single group was those spending 11-20 nights (22%).


25%

20%

15%

10%

5%

0%
0 1-10 11-20 21-30 31-40 41-50 51-60 61-70 71-80 81-90 91-100 101+

Hotels 2020:
Beyond Segmentation
November 2010

Amadeus has commissioned Fast Future Research to undertake a study on the
drivers of change for the globally branded hotel sector over the next decade and
the resulting implications in terms of hotel strategy, brand portfolio, business
models, customer targeting and innovation.

www.amadeus.com
www.amadeus.com/hotelit

Amadeus hotels 2020 beyond segmentation web version2

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